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Full text of "The crisis of the Italian state : from the origins of the Cold War to the fall of Berlusconi"

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The Crisis of 
THE Italian State: 
From the Origins 
OF THE Cold War 

TO THE Fall of 
Berlusconi 



The Crisis of 
THE Italian State: 
From the Origins 
OF the Cold War 

TO THE Fall of 
Berlusconi 

Patrick McCarthy 



MACMILIAN 



© 1 99 5 by Patrick McCarthy 

All rights reserved. No reproduction, copy or transmission of 
this publication may be made without written permission. 

No paragraph of this publication may be reproduced, copied or 
transmitted save with written permission or in accordance with 
the provisions of the Copyright, Designs and Patents Act 1988, 
or under the terms of any licence permitting limited copying 
issued by the Copyright Licensing Agency, 90 Tottenham Court 
Road, London W1P9HE. 

Any person who does any unauthorised act in relation to this 
publication may be liable to criminal prosecution and civil 
claims for damages. 

First published 1995 by 

MACMILLAN PRESS LTD 

Houndmills, Basingstoke, Hampshire RG21 6XS 

and London 

Companies and representatives 

throughout the world 

ISBN 0-333-66052-8 

A catalogue record for this book is available 
from the British Library. 

10 98765432 
04 03 02 01 00 99 98 97 96 

Printed in the United States of America by 
Haddon Craftsmen 
Scranton, PA 



To the memory of my parents 
Anne and William McCarthy 



y276870 



CONTENTS 

Frequently Used Abbreviations viii 

Biographical Sketches ix 

Preface xxiii 

1. Corruption and the Overworked State 1 

2. The Postwar Setdement: Catholic Hegemony? 17 

3. Italy and the World: Helpful Americans, 

Rich Europeans, and Resourceful Italians 41 

4. Clientelism as the Art of Government 61 

5. The Publicization of the Economy 81 

6. Enrico Berlinguer and the Historic Compromise 103 

7. From Craxi the Exacter to Bossi the Spoilsport 123 

8. February 1992 to March 1994: Revolution 

and Restoration? Or Change? 139 

9. Clan Rule 167 

Conclusion: The Elusive Citizen 193 

Notes 199 

Index 221 



FREQUENTLY USED ABBREVIATIONS 

AD Alleanza democratica; Democratic Alliance 

AN Alleanza nazionale; National Alliance 

CCD Centre cristiano democratico; Center of Christian Democracy 

CGIL Confederazione generale italiana del lavoro; Italian General 
Confederation of Labor 

CSIL Confederazione italiana sindacati lavoratori; Italian Confederation 
of Labor Unions 

CNL Comitato di liberazione nazionale; Committee of National Liberation 

Comit Banca commerciale italiana; Italian Bank of Commerce 

CSM Consiglio superiore della magistratura; Supreme Council of Magistrates 

DC Democrazia cristiana; Christian Democratic Party 

ENI Ente nazionale idrocarburi; National Petroleum Company 

FI Forza Italia; Let's Go Italy 

IRI Istituto per la ricostruzione industriale; Institute for industrial 

reconstruction 

Lega Lega Nord; Northern League 

MSI Movimento sociale italiano; Italian Social Movement 

PCI Partito comunista italiano; Italian Communist Party 

PDS Partito democratico della sinistra; Democratic Parry of the Left 

PPI Partito popolare italiano; Italian People's Party 

PS I Partito socialista italiano; Italian Socialist Party 

RC Rifondazione comunista; Communist Refoundation 



BIOGRAPHICAL SKETCHES 



These brief biographical notes are designed to help the reader situate the 
characters of my story. Often the sketches depict only the aspects of a life that 
are discussed in the book. Thus Italo Calvino is presented as a left-wing 
intellectual; space does not permit an account of his work as a whole. People 
whose lives are described within the text are not included here: Enrico 
Berlinguer, Silvio Berlusconi, Enrico Cuccia, Antonio Di Pietro, Leonardo 
Sciascia, and others fall under this category. 

AGNELLI, GL\NNI Bom Turin, 1921. Grandson of Giovanni Agnelli. Took over the 
running of Fiat 1966. Currently Chairman of Fiat. 1974-76 Chairman of Employers 
Association, where he helped negotiate wage indexation. 

AGNELLI, GIOVANNI Born 1866. Founded Fiat in 1899 and ran the company almost 
until his death in 1945. 

AGNELLI, SUSANNA Born 1922. Sister of Gianni. Minister of Foreign Affairs in the 
Dini government. 

D'ALEMA, MASSIMO Born 1949 into a Communist family. Has spent his entire active 
life in the PCI-PDS. Former Secretary of the Young Communists and former editor 
of L'Unita. Replaced Occhetto as Secretary of the PDS in 1994. 

ALFIERI, CARMINE Camorra leader, rival of Raffaeie Cutolo. Arrested in the post- 1992 
war against organized crime. Has turned state's evidence. 

AMATO, GIULL\NO Born 1938, University Professor. Elected member of padiament 
for the PSI in 1983. Held many government posts including Treasury Minister 
1988-89. Influential in reform of banking system. Close collaborator of Bettino Craxi. 
Prime Minister 1992-93. 

D'AMBROSIO, GERARDO Member of Milan pool of magistrates who launched the 
Clean Hands investigation. Believed to be favorable to the PDS. 

AMBROSOLI, GIORGIO Appointed by government to sort out Michele Sindona's 
financial misdealings. Refused cover-ups. Murdered by U.S. Mafia at Sindona's behest 
in 1979. Film of his life, A Middle-class Hero, 1995. 



X THE CRISIS OF THE ITALIAN STATE 

ANDREATTA,BENIAMINOBorn 1928. University Professor of Economics. DC Senator 
1976-present. Minister of Treasury, 1981-82. Minister of Foreign Affairs in Ciampi 
government 1993-94. 

ANDREOTTI, GIULIO Born 1919. Has spent entire adult life in DC. Protege of De 
Gasperi. Considered close to Vatican. Perennial Minister. Prime Minister during the 
Historic Compromise years 1976-79 and again 1989-92. Had his own faction, the 
Andreottiani. Influential in Sicily via Salvo Lima. 1995 sent to trial for alleged ties with 
Mafia. 

ARLACCHI, PINO Sociologist, expert on organized crime. Elected to parliament on PDS 
list, 1994. Member of anti-Mafia Commission. 

BADALAMENTI, GAETANO Leading member of Mafia family defeated by the Corleonesi 
in the early 1980s. Now in prison in the United States. 

BARESI, FRANCO Captain of AC Milan and of Italy. One of the world's great defensive 
soccer players. 

BASSOLINO, ANTONIO Born 1947. Active in the PCI. Elected to Central Committee 
1972. Elected Mayor of Naples 1993. 

DE BENEDETTI, CARLO Born 1934. Industrialist and financier. 1978 CEO and main 
shareholder of Olivetti. Chief owner of La Repubblica and L'Espresso. Has admitted 
paying bribes to obtain government contracts. 

BERLUSCONI, PAOLO Born 1949. Business associate of his elder brother Silvio. Under 
investigation in the Clean Hands operation. 

BIONDI, ALFREDO Born 1928. Lawyer. 1968 elected member of parliament for the 
PLI. Minister of Justice in 1994 Berlusconi government. 

BORSELLINO, PAOLO Born Palermo, 1940. Magistrate who played leading role in the 
campaign against Mafia. Murdered July 1 992. 

BOTTAI, GIUSEPPE 1895-1959. One of founders of Fascism. Minister of Education 
1936-43. Fostered intellectual dissent but kept it within strict limits. 

CAGLIERI, GABRIELE 1 926-93. Engineer and executive in chemical industry. Had links 
with PSI. Vice-chairman of Enichem. 1989 named head of ENI. 1993 committed 
suicide after the Enimont scandal broke. 

CALVI, ROBERTO Financier, owner of Banco Ambrosiano. Backed by Vatican. Ties to 
Michele Sindona and Licio Gelli. 1981-82 fraud was uncovered and Calvi was jailed; 
the press reported stories of huge bribes to politicians; Calvi was found dead, hanging 



Biographical Sketches xi 

beneath a bridge in London. It is unclear whether he committed suicide or was 
murdered. 

CALVINO, ITALO Born 1 923. Communist intellectual who broke with the PCI in 1956, 
author of La giornata di uno scrutatore{\965), which offers a critical but sympathetic 
view of the party. 

CARLI, GUIDO 1914-92. Governor of the Bank of Italy 1960-75, President of Con- 
findustria 1976-80. Minister of the Treasury in 1989-92 Andreotti government. 

CARNEVALE, CORRADO Born 1931 in province of Agrigento. President of a section of 
Supreme Court which reviews decisions made by lower courts. Accused of using this 
power to overturn sentences passed on Mafiosi. Investigated in September 1992 and 
suspended from the magistrature in April 1993. 

CASELLI, GIANCARLO Born Piedmont, 1940. Sent to Palermo as head of anti-Mafia 
pool of magistrates in December 1992. 

CAVOUR, CAMILLE 1810-61. Piedmont statesman, whose diplomatic skills helped 
unite Italy. Favored separation of church and state. 

CEFIS, EUGENIO Born 1921. Collaborator of Mattei. 1967 President of ENI. 1970-77 
President of Montedison. 

DALLA CHIESA. CARLO ALBERTO 1920-82. General of the Carabinieri. 1978 led 
successful anti-terrorist campaign. Appointed Prefect of Palermo in 1982 and quickly 
murdered by Mafia. 

CIAMPI, CARLO AZEGLIO Born 1920. Governor of the Bank of Italy 1979-93. Prime 
Minister 1993-94. 

COLLODL CARLO Tuscan author, published Pinocchio in 1880. 

COLOMBO, EMILIO Born 1920. Elected to parliament in 1948. DC chieftain in the 
Basilicata. Perennial Minister including Prime Minister and Minister of Foreign 
Affairs. 

CONSO, GIOVANNI Born 1922. Magistrate and University Professor. Minister of 
Justice in Amato government. Drafted March 1993 decree which aroused popular fury. 

CORBINO, EPICARMO Liberal Party politician. Minister of Treasury in early postwar 
governments. Supporter of austerity and opponent of currency exchange. 

COSSIGA, FRANCESCO Born 1928. Cousin of Enrico Berlinguer. Elected DC member 
of parliament 1958. Minister of Interior during Moro kidnapping. President of the 
Republic 1985-92. 



xii THE CRISIS OF THE ITALIAN STATE 

CRAXI, BETTING Born 1934. Secretary of the PSI 1976-93. Prime Minister 1983-87. 
Ally of Silvio Berlusconi. Massive accusations of corruption 1992-present. Currently 
resident in Tunisia. 

CRISPI, FRANCESCO 1818-1901. In united Italy a left-wing leader with authoritarian 
inclinations. 1894 harsh repression of Sicilian protest. Supported colonization but had 
to resign as Prime Minister after the Italian army was defeated by the Abyssians at the 
battle of Adua 1896. 

CRISTOFORI, NINO Born Ferrara, 1930. Andreotti's emissary to Emilia-Romagna. 
Under-Secretary in the 1 989 Andreotti government. 

CROCE, BENEDETTO 1 866- 1952. Philosopher, historian, literary critic. Neo-Hegelian, 
he was the leading thinker of Liberal Italy. Slow to oppose Mussolini, he became a 
focus of cultural resistance to Fascism. Influenced Antonio Gramsci as well as the 
post-World War II generation. 

CURTO, DIEGO Born Messina, 1925. Acting President of Milan court. Sequestered the 
extra shares which Raul Gardini bought to gain outright control of Enimont. Curt6 
was accused of accepting a bribe in return for this action. Imprisoned September 1 992. 

CUTOLO, RAFFAELE Leader of one branch of Camorra. 1981 he negotiated with the 
Red Brigades terrorists the release of Antonio Gava's henchman. Giro Girillo. He is 
currently in prison. 

DINI, LAMBERTO Born 1931. Banker. 1976-80 official of the IMF. 1979-94 Director 
General of the Bank of Italy. Minister of Treasury in 1994 Berlusconi government. 
Prime Minister since December 1994. 

DONAT-CATTIN, CARLO Born 1919. DC chieftain in Piedmont. Perennial Minister. 
Leader of faction, Forze Nuove. 

DOSSETTI, GIUSEPPE Born 1913. Organized Catholic anti-Fascist groups. Joined the 
DC in 1945 and became leader of the left-wing faction. Resigned from parliament in 
1952. Abandoned political life in 1956 and was ordained a priest 1959. 

DRAGO, NINO Born 1924. DC leader in Catania. Mayor of city 1964-66. First elected 
to parliament 1968. 

FAINA, CARLO Born 1894. Worked at Montecatini 1926. Named President of com- 
pany 1956. Was President when Montecatini ftised with Edison. 

FANFANLAMINTOREBorn 1908. University Professor. Joined the DC in 1945, elected 
to Parliament in 1946. Held numerous ministerial posts, including Prime Minister. 
Appointed Senator for life in 1972. 



Biographical Sketches xiii 

FALCONE, GIOVANNI 1939-92. Magistrate at Palermo who led the anti-Mafia cam- 
paign. His investigation helped lead to 1986 trial. 1991 moved to Rome where he 
worked for Ministry of Justice. In 1992 (outside of Palermo) the Mafia murdered 
Falcone, his wife, and his three bodyguards. 

FELLINI, FEDERICO 1920-93. Film director. Films include Le notte di Cabiria (1957), 
La dolce vita (1959), which includes an attack on the corruption of prosperous Italy, 
and La voce della Luna (1989), a diatribe against modernity. 

FERRUZZI, SERAFINO 1908-79. Founded the family firm, Ferruzzi of Ravenna. Began 
with transportation of grain, built up a food-products conglomerate and then diversi- 
fied. Remained unpretentious and was nicknamed "the Peasant." He was one of richest 
men in Italy. 

FINI, GIANFRANCO Born 1952. Joined the MSI at an early age. Replaced Almirante as 
Parry Chairman 1987. 1993-presentled the party's revival and its 1995 transformation 
into AN. 

FORLANI, ARNALDO Born 1925. Lawyer and DC chieftain in the Marche. Frequently 
Minister. 1989-92 Party Secretary in CAP period. Investigated in Clean Hands 
operation. 

GARDINI, RAUL Born 1933. Son-in-law of Serafino Ferruzzi whom he succeeded as 
head of company. 1 987 took over Montedison. Launched the Enimont venture. Later 
broke with rest of Ferruzzi family. When the Enimont scandal broke in 1993 Gardini 
committed suicide. 

GASPARI, REMO Born 1921. DC chieft:ain in the Abruzzo. Perennial Minister. 

DE GASPERI, ALCIDE 1881-1954. Born in Trento that then belonged to Austria. 
Member of the Austro-Hungarian parliament 1911-18. Helped found PPL Im- 
prisoned 1927-28 and then found refuge in Vatican library. Leading role in organizing 
DC from 1942 on. Prime Minister in December 1945. Won landmark elections 1948. 
Led party and government until 1953. 

GAVA, ANTONIO Born 1930. DC boss in Naples, a position he inherited from his father 
Silvio. President of the provincial Council of Naples 1 963. Member and then President 
of the Regional Council of Campania 1970. Elected to parliament 1972. Held several 
ministerial posts including Interior. 1993-present accused of ties with Camorra. 

GELLI, LICIO Born 1919. In his youth he was a Fascist. Created masonic lodge, 
Propaganda 2 (P2), which reached its peak in 1970s. Its members, politicians, busi- 
nessmen, and policemen, plotted against democracy while enriching themselves by 
drugs and arms trade, financial fraud, and blackmail. List of members discovered 1981. 



xiv THE CRISIS OF THE ITALIAN STATE 

Gelli fled, was jailed in Switzerland, escaped, and was recaptured. Despite numerous 
charges filed against him, he lives a normal life in Italy. 

GENTILE, GIOVANNI 1 875- 1 944. Philosopher and politician. Neo-Hegelian and friend 
of Croce. Belief in thought as action led him to Fascism. Initiated reform of secondary 
education 1922-24. Killed by partisans. 

GIULIANO, SALVATORE 1922-50. Bandit, of peasant origin, officially on the run after 
1943. Linked with Sicilian independence movement. Committed murders and rob- 
beries on behalf of large landowners. In 1947 organized May Day massacre at Portelle 
delle Ginestre. Captured and died of poison in prison. His role taken over by Mafia. 

GRONCHI, GIOVANNI 1887-1978. A founder of PPI. Active in DC from 1943. 
President of the Republic 1 955-62. On the Left of party with authoritarian tendencies. 

LAMA, LUCLANO Born 1921. Partisan in Romagna. Trade unionist and PCI member. 
1970-86 General Secretary of CGIL. Associated with wage restraint during Historic 
Compromise. Elected to senate 1987. On the Right of party, considered a reformer. 

LA MALFA, UGO 1903-79. An anti-Fascist who became the leading figure in the PRI. 
Expert in economics, believer in the free market but also in informed state intervention. 
Considered close to Northern industrial circles. 

L\ PIRA, GIORGIO 1904-77. Joined DC 1945, member of Dossetti's faction. Mayor 
of Florence 1951-57 and 1961-66. Active opponent of the Vietnam war. 

LAURO, ACHILLE 1982-87. Arms dealer and politician. Founded the largest private 
Italian shipping line. Mayor of Naples 1951-58. Practiced a crude formof clientelism. 
Monarchist who went over to MSI in 1972. 

LEONE, GIOVANNI Bom Naples, 1908. Elected to parliament for DC 1946. President 
of Republic from 1971-78. Forced to resign after accusations of corruption. 

LEVI, CARLO 1902-75. Artist, writer, and anti-Fascist. His most famous book, Christ 
stopped at Eboli (1945), describes his confinement in Lucania. L'Orobgio, a novel about 
the early postwar, has been much discussed recently. 

LIGRESTI, SALVATORE Born Catania, 1932. Entrepreneur based in Milan. Prominent 
in construction and owner of the insurance company SAL Further interests in motor- 
ways, hotel chains, and clinics. Associate of Craxi. Frequendy investigated during Clean 
Hands operation. His holding group fell into difficulties and has been tended by Enrico 
Cuccia. 

LIMA, SALVO Born Palermo, 1928. Spent his entire active life in DC. City councilor 
and then mayor of Palermo. 1968 elected to parliament. 1979 withdrew to European 



Biographical Sketches xv 

Parliament. Close ties with Andreotti. Widely regarded as the DCs ambassador to 
Mafia. Murdered by Mafia 1992 probably because he could no longer fulfil his 
promises. 

DE LORENZO, FRANCESCO Born Naples, 1938. Member of parliament for PLI. 
Minister of the Environment 1986, Minister of Health 1989-92. Multiple accusations 
against him in Clean Hands investigation. 

LUZZATTI, LUIGI 1841-1927. Economist and politician. Favored state invention in 
industry and also the creation of cooperatives. 

MANCINO, NICOLA Born 1931. Lawyer and politician. DC provincial secretary for 
Avellino, and regional secretary for Campania. Elected senator in 1976. Minister of 
Interior in Ciampi government. Now member of PPI. 

MARTELLI, CLAUDIO Born 1 943. Joined the PS 1 in 1 967, became secretary of the Milan 
branch in 1975. Craxi's number two. In 1989 became Deputy Prime Minister. 
Implicated in Clean Hands investigation suddenly abandoned politics in 1993. 

MARTINAZZOLL MINO Born 1 93 1 . Elected Senator for the DC in 1 972, and member 
of parliament in 1983. Considered honest. Became Party Secretary during the Clean 
Hands investigation but could not avert electoral defeat in 1994. Withdrew from 
politics but has returned as Mayor of Brescia. 

MATTEL ENRICO 1906-62. Businessman, partisan commander, member of DC. At 
AGIP he headed the successful search for hydrocarbons in the Po Valley. Founded ENI 
and challenged the international oil companies. Associated with Neo-Adanticism. 
Died in an air crash which many Italians believe to have been orchestrated by his 
enemies, although there is scant proof 

MATTIOLI, RAFFAELE 1895-1973. Economist, civil servant, and banker. Played a 
leading part in rebuilding Comit after the interwar crisis. Retained his role in the 
postwar years. Helped create Mediobanca. 

MAZZOTTA, ROBERTO Born 1 940. Elected member of parliament for the DC in 1 972, 
national deputy-secretary of the DC 1979. In 1987, with no previous experience of 
banking, named Chairman of Italy's largest savings bank, Cariplo (Cassa di Risparmio 
delle Province Lombarde). Forced to resign during Clean Hands investigation. 

MENICHELLA, DONATO 1896-1984. Director General of IRI 1933-43. Governor of 
the Bank of Italy 1948-60. One of Italy's great civil servants. 

MERZAGORA, CESARE Born 1898. 1920-27 with Comit. 1938 General Manager of 
Pirelli. 1948 elected to senate as DC independent. Appointed President of the senate 



xvi THE CRISIS OF THE ITALIAN STATE 

in 1958 and Senator for life in 1963. 1968-78 President of Italy's largest insurance 
company, Assicurazioni Generali. In 1972 moved away from DC. 

DE MITA, CIRIACO Born Avellino, 1928. 1963-present DC parliamentarian. Became 
leader of the Left faction. 1 982-89 Party Secretary. Clashed with Craxi. 1 988-89 Prime 
Minister. Lost both posts at start of CAF period. Despite accusations that he misused 
government funds, sent after the Irpinia earthquake, De Mita has survived the Clean 
Hands investigation. 

MORANDI, RODOLFO 1902-55. Socialist politician. Minister for Industry 1946-47. 
Helped set up SVIMEZ, an organization to develop the South. 

MORO, ALDO 1916-78. Elected to parliament for the DC in 1948. Considered the 
supreme mediator. Key role as Party Secretary and Prime Minister in the Center-Left 
years. 1976 President of the DC and, along with Berlinguer, architect of the Historic 
Compromise. Kidnapped, held hostage, and murdered by the Red Brigades in 1978. 
His letters from prison are a last attempt to mediate. 

NAPOLITANO, GIORGIO Born 1928. Joined the PCI in 1945. Became leader of the 
parry's Right, seeking to transform the PCI into a Western European Socialist party. 
Worked on economic issues during the Historic Compromise and on foreign policy 
for much of the 1980s. Supported the transformation of the PCI into the PDS 
1989-91. 

OCCHETTO, ACHILLE Born 1936. 1963-66 Secretary of the Young Communists. 
Elected to parliament in 1976. 1979 member of the Central Committee. 1988 
appointed secretary of PCI and next year undertook the slow but successftil transfor- 
mation into the PDS. Secretary of PDS until defeat in European elections of 1994. 

ORLANDO, LEOLUCA Born 1947. DC politician and Mayor of Palermo. Rebelled 
against DC collaboration with Mafia and formed La Rete, a left-wing. Catholic protest 
party, which performed poorly in the national elections of 1992 and 1994. Orlando 
was reelected Mayor of Palermo in 1993. 

PAjETTA, GIANCARLO Born Piedmont, 1911. Member of clandestine PCI. Arrested 
and sentenced to 21 years in prison in 1933, released in 1943. Vice commander of the 
Garibaldi brigade during the Resistance. Held many leadership posts in postwar PCI. 
Famous for the independence of his thought. Died during the transition to PDS, 
troubled by splits in party. 

PANNELLA, MARCO Born 1930. In 1956 supported the Partito Radicale when it split 
from the PLI. Used civil disobedience and referenda to obtain social reforms. In the 
1970s the Radicals led struggle for divorce and abortion. However since 1992 Pannella 
has resisted the transformation of the system that allowed him to be a leader of dissent. 



Biograp hical Sketches xvii 

PARENTI, TIZIANA Member of Milan pool. Anti-PDS, she quarrelled with other members 
of pool. She resigned and was elected to parliament on the FI list. However she has also 
been critical of FI. At present head of parliamentary anti-Mafia Commission. 

PARRI, FERRUCCIO 1890-1981. Anti-Fascist journalist. In 1943 helped found the 
Action Party and the Justice and Liberty partisans. Prime Minister in 1945, his 
overthrow marks the end of the Resistance's attempt to shape the postwar government. 

PASOLINI, PIER PAOLO 1922-1975. Writer and film director. Active in Friulan PCI 
but was expelled from the party in 1 949 because of his homosexuality. Remained close 
to the PCI and also admired peasant Catholicism. In his last years he denounced 
modernity, condemning technology and consumerism as new forms of Fascism in 
books such as The Lutheran Letters. Murdered in a homosexual incident that has never 
been fully explained. 

PELLA, GIUSEPPE 1 902-8 1 . DC politician. Prime Minister in 1 953-54 when EDC was 
a great issue. 

PERTINI.ALESSANDRO 1896-1990. Militant Socialist from 1918 and ardent opponent 
of Fascism. Socialist parliamentarian, unloved by Craxi. Named President of the 
Republic in 1978, he became very popular by speaking out on issues such as the 
government's incompetent response to the Irpinia earthquake. 

PICCOLI, FIAMINIO Born 1915. DC chieftain in Trento. Generally belonged to the 
Doroteo or Centrist faction. Has held many posts in party and government. 

POPE PIUS XII (EUGENIO PACELLI) 1876-1958. Elected Pope in 1939. Reluctant to 
speak out against Nazism but strongly anti-Communist. Provided leadership in Italy 
after the collapse of Fascism. Authoritarian, he was also devoted to Mary and defined 
the dogma of the Assumption. In his last years feared the ravages of lay, modern society. 

PRANDINI, GIANNI Born 1940, active in DC youth groups, became President of the 
Brescia DC in 1969. Rival to Martinazzoli. Elected to parliament in 1972. His period 
as Minister of Public Works provided him with limitless opportunities for "taxing" 
construction companies and he has been a target of the Clean Hands investigation. 

PREVITI, CESARE Born 1934. Lawyer among whose clients was Silvio Berlusconi. 
Minister of Defence in Berlusconi government. 1994 appointed coordinator of FI. 
Considered close to AN. 

PRODI, ROMANO Born 1939. Economist, University Professor. Linked with DC Left. 
1982-89 chairman of IRI. Returned to post in 1993-94 and was active in privatization. 
1995 formed movement, the Olive Tree, which unites the PDS and Center-Left 
Catholics of the PPL Probable Prime Minister if his movement wins the next elections. 



xviii THE CRISIS OF THE ITALIAN STATE 

RIINA, T0T6 Considered head of Sicilian Mafia. His family, the Corleonesi, defeated 
other families in the wars of early 1980s. Arrested in 1993. Supposedly on the run, he 
had for many years been living a normal life in Palermo. In prison has conducted a 
campaign to discredit the Mafiosi who have turned state's evidence. Even by Mafia 
standards Riina is considered a violent man. He is currently on trial (Spring 1995) for 
the murder of Falcone. 

RIZZOLI, ANGELO 1889-1970. Publisher and industrialist. His publishing empire 
expanded after the World War II to include the periodicals Europeo and Oggi. He also 
produced films by Fellini, De Sica, and Rossellini. His son Andrea and his grandson 
Angelo followed in his footsteps. In 1974 the firm took over the great newspaper of 
the Milan bourgeoisie, II Corriere della sera. However the Rizzolis encountered financial 
difficulties and became entangled with Gelli and the P2. In 1985 the publishing house 
was taken over by Gemina, where the Agnellis are major shareholders. 

ROMITI, CESARE Born 1923. Industrial executive. Joined Fiat as Central Manager of 
finance, planning and control in 1974, in 1976 became Managing Director of Fiat 
S.p.A. Masterminded the restructuring of Fiat in early 1980s and handled the bitter 
dispute with the unions in autumn 1980. Has been accused since 1992 of knowing 
Fiat paid bribes to obtain contracts. Postponed his retirement to supervise the present 
reshaping of the company. 

ROVELLI.NINO Born 1917. 1966 Chairman ofSocieta Italiana Resine (SIR). Consid- 
ered close to Andreotti. 

RUFFOLO, GIORGIO Born 1926. Economist. 1956-62 head of research and public 
relations of ENI. 1 983 elected to parliament as a Socialist. Unloved by Craxi. 1 987 named 
Minister of the Environment. Elected in 1994 on the AD list. 

RUINI, CARDINAL CAMILLO Born 1 93 1 . Ordained 1 954, became bishop in 1 983. Head 
of Italian Council of Bishops. Considered very anti-PDS. 

RUMOR, MARIANO 1915-90. A DC chieftain in Veneto. Ally of Antonio Bisaglia. 
Doroteo. Numerous party and ministerial posts. Prime Minister 1968-70 and 1973-74. 

DE SANCTIS, FRANCESCO 1817-83. Critic and literary historian. Imprisoned for activities 
against the Bourbons 1850-53 and exiled first to Turin 1854-55 and then to Zurich 
1856-60. Returned to Naples after Unification and became Minister of Education 
1861-62. 1872 awarded chair of literature at Naples University. His Storia della letteratura 
italiana is a hegelian analysis of Italian society and culture from its beginnings to the 
nineteenth century. De Sanctis was admired by both Croce and Gramsci. 



Biographical Sketches *"' 

SARACENO, PASQUALE Born 1903. Economist and planner. Worked at Comit and 

then in 1933 at the reorganized IRI. 1946 helped found SVIMEZ. One of Italy s most 

able technocrats. 

SARCINELLI, MARIO Born 1934. Worked at Bank of Italy. 1979 briefly jailed because 

he reftised to bail out Sindona and other DC proteges with taxpayers' money. Recently 

appointed head of Banca nazionale del lavoro. 

SATTA, SALVATORE 1902-75. Born at Nuoro in Sardinia. Professor of law and writer. 

Author oiDe Profiindis (1948) and one of the best postwar Italian novels, II gtorno del 

giudizio. 

SCALFARO, OSCAR LUIGI Born 1918. Magistrate, devout Catholic and DC politician 

with a reputation for honesty. 1983-87 Minister of Interior. Elected President of 

Republic 1992. 

SCELBA, MARIO 190 1-91. DC politician. Minister of Interior from 1947 to 1953. Did 

not hesitate to use force to keep order in a tense period. 

SECCHIA, PIETRO 1 903-73. Founder member of the PCI at Livorno Congress of 1 921 . 

1931 jailed by Fascist government. Released in 1943 he became a Resistance leader. 

After the Liberation he frequently opposed Togliatti, calling for a tougher line. 

SCHIMBERNl, MARIO Born 1923 in a modest Roman family. Held several posts in 
chemical industry. Went to Montedison 1977. Appointed chairman 1980. Forced out 
byCardini 1987. 

SEGNI, MARIO Born 1939. Elected to parliament for the DC in 1976. Took up cause 
of electoral reform and the method of the referendum. Leading role in organizing the 
1991 and 1993 referenda. Left DC in 1993 and formed his own movement but did 
not join forces with the Uk. In 1994 elections he returned to the Catholic fold but 
his Patto won only 4.6 percent of the vote. At present backing Prodi. 
SFORZA, CARLO 1872-1952. Foreign Minister in die Giolitti government 1920-21. In 
opposition throughout the Fascist years. In 1943 he returned to Italy and gravitated 
towards the lay parties. As Foreign Minister, 1947-51, he supervised the peace treaties 
and Italy's entry into the Adantic alliance. 

SIGNORILE, CLAUDIO Born 1937. Joined PSI in 1956. On the Left of the party. 
Formed an alliance with Craxi in 1976 but saw his power gradually whittled down. 
Various government posts. 

SINDONA, MICHELE Born 1 920 in Sicily. Tax expert and financier. Ties with Andreotti 
and Vatican. Acquired Banca Privata and Franklin Bank (New York) which was 



XX THE CRISIS OF THE ITALIAN STATE 

declared insolvent in 1974. Sindona's Italian empire collapsed too and he was eventu- 
ally imprisoned. Member of P2. He died of poison while he was in prison. 

SINIGAGLIA, OSCAR 1877-1953. A far-sighted dirigist. Went to IRI in 1930. After the 
war he headed the public steel company, Finsider, and helped Italy develop a modern 
steel industry. 

SPADOLINI, GIOVANNI 1925-94. Was the director of II Resto del Carlino (1955-68) 
and oi II Corriere della sera (1968-72). In 1972 he was elected Senator for the PRI. 
Held several ministerial posts and was the first non-DC Prime Minister 1981-82. 
1987-94 Speaker of the Senate. 

STURZO, LUIGI 1871-1959. Politician and priest. Founded the Partito Popolare in 
1919. As Party Secretary opposed Fascism but lost the support of the Vatican. In 1924 
he went into exile. 

TAMBRONI, FERNANDO 1901-63. DC parliamentarian. In 1960 he formed a govern- 
ment which ruled with the support of the neo-Fascists. The big anti-Fascist demon- 
strations, which were put down by the police with many deaths, showed that the MSI 
was not a legitimate coalition partner for the DC. 

TAVIANI, PAOLO-EMILIO Born 1912. Leader of the Resistance in Liguria. Elected 
member of parliament for the DC in 1945. Helped negotiate the Coal and Steel Pool. 
Perennial minister. Member of Doroteo faction. 

TOGLIATTI, PALMIRO 1893-1964. Friend of Gramsci. Co-hunder of L'Ordine nuovo 
(1919) and of PCI (1921). Led the party after the arrest of Gramsci. Leading role in 
Third International. Collaborated in Stalin's crimes but saved the PCI ruling group. 
In 1944 launched the new party at Salerno. Established the strategy of parliamentary 
methods and cooperation with the Catholics. Moved, albeit slowly, away from Moscow 
between 1956 and his death in 1964. 

TRENTIN, BRUNO Born France 1926. Trade Unionist. 1941-45 fought in the Resis- 
tance in France and Italy. 1949 began work at CGIL and in 1950 joined the PCI. On 
the Left of party, he was an advocate of worker control. Active in Hot Autumn of 1 969. 
Trentin grew more moderate and, as Secretary of CGIl, he supported Occhetto's 
transformation of the PCI into the PDS. In 1993 he helped negotiate the new 
framework of Italian labor relations. 

VALERIO, GIORGIO Born 1904. Engineer. Career in electrical industry. Managing 
director of Edison at moment of nationalization. 

VALLETTA, VITTORIO Born 1883. President of Fiat from 1946 to 1966. Considered 
responsible for Fiat's postwar success and for its tough labor relations. 



Biographical Sketches xxi 

VANONI, EZIO 1903-56. DC politician, economist and planner. Elected Senator in 
1948. As Minister of Finance (1948-54), he began a reform of the tax system, 
introducing annual individual tax returns. As Minister of the Budget (1954-56), he 
put forward, along with Saraceno, a development plan that stressed public intervention 
in the economy. 

VIGAN6, RENATA 1900-76. Active in the Resistance alongside her husband Antonio 
Meluschi. Her novel L'Agnese va a morire (1949) and the film based on it have been 
much discussed in the recent debates about the Liberation. 

VIOLANTE, LUCIANO Born 1941. Worked for 1 1 years as judge in Turin. Elected to 
parliament for the PCI in 1979. As member and then Chairman of the anti-Mafia 
Commission he exposed the links between the political class and organized crime. 
Resigned as Chairman in 1994. The Mafia has threatened to kill him. 

VISCONTI, LUCHINO 1906-76. Film director, close to PCI. Made Rocco e i suoi fratelli 
in 1960. Other films include L'Os5essione{\^Al), which launched neo-realism, and // 
Gattopardo{\^G'i). 



PREFACE 



This book grew out of the last chapter of a book that I coedited on the Italian 
elections of 1992. In "Inching Towards a New Regime" I tried to trace the 
consequences of that election on the period that ended with the April 18, 1993, 
referendum on institutional reform. It was a simple narrative account written 
as events were taking place. In fact, many public figures who played important 
roles in my first draft were under arrest in the final version. 

The Crisis of the Italian State represents an attempt to grasp the causes of 
the Italian upheaval. It, too, has been written in close proximity to the events. 
Silvio Berlusconi's government fell in December 1994 just when I was attempt- 
ing my analysis of it, and I could merely note Lamberto Dini's appointment as 
Prime Minister before dispatching my manuscript to the publisher. So the tale 
I am telling is unfinished and it ends, as any book on contemporary Italy should, 
with three dots . . . 

Essentially this work is a historical essay. Chapters 2 through 7 each begin 
with a significant issue of the last three years and then uncover its origins. Not 
that I have the pretention of writing a history of postwar Italy: there are already 
many excellent histories and I have drawn liberally on them. Similarly chapter 
5, which deals with economics, is in no sense an analysis of the entire Italian 
economy. It picks out certain strands in the economy that help explain current 
issues like the Enimont venture or the privatization program. So I have used 
history to explain the turbulent years from 1992 to 1995. 

My starting point emerges in chapter 1 from a review of the events that 
separate the 1992 elections from Berlusconi's coming to power. Italians have 
quite simply been living through a fourth attempt to (re-)found the state. This 
obliges me to undertake the daunting task of defining what the "problem" of 
the state is and how it emerged from the Unification period. 

Chapter 2 argues that the third (re-)founding at the Liberation had run its 
course with the demise of the Christian Democrats. It then goes back to look at 
how that regime emerged and where its weaknesses lay. Chapter 3 sets the postwar 
state in its international context because, unlike many observers, I argue that Italy 
had considerable room to maneuver and that more decisions were made in Rome 
(which includes the Vatican) than in Moscow, Washington, or Brussels. 



XXIV THE CRISIS OF THE ITALIAN STATE 

Chapters 4 and 5 draw on the Clean Hands investigation to examine the 
structure of systemic clientelism that underlay the postwar order. Although that 
order was in no sense a complete failure, clientelism undermined the Liberation 
attempt to construct a state that could pass the tests of representation and 
efficiency, and it led to the events of 1992 to 1995. Chapter 6 analyzes the 
historic compromise as the most serious bid to remedy the weaknesses of the 
postwar order, while chapter 7 looks at the last actors to take the stage: Bettino 
Craxi's Socialists and the regime's grave digger, the Northern League. 

Chapter 8 deals with two years, February 1992 to March 1994, in their 
historical context. It depicts this period as a regime crisis and modernization 
crisis; it examines the attempts to set up a new political and economic order. 
Chapter 9 analyzes the Berlusconi government as the product both of those 
attempts and of the resistance to them. The conclusion does not definitely end 
the tale, but offers some reflections on its main protagonist, the Italian state. 

Two principles have guided me throughout the work. The first is that in 
limiting the importance ascribed to the international setting, or rather in trying 
to show how it meshed with "Italian Time," one has to deal with a host of Italian 
issues. These include not merely the polidcal actors but the Church, the Mafia, 
the magistrates, the big companies, and many others. To deal with all of them 
is an enormous and probably foolhardy undertaking, but it is necessary if one 
believes that the present upheaval has multiple causes, of which changes in the 
behavior of social groups — the magistrates or the small industrialists of northern 
Italy — are the most important. 

The second principle is my conviction that Italian society and government 
can indeed change, that many Italian commentators exaggerate their country's 
weakness and that the present attempt to refound the state will not inevitably turn 
into a restoration. On the last point Silvio Berlusconi has — at least until now — 
done his utmost to prove me wrong. But in general the skeptical, lucid pessimism 
that informs much good Italian commentary seems to me a trait of Italian political 
culture rather than the correct conclusion to draw from Italian history. 

I have enjoyed the advantage of wrinng this book at the Bologna Center of 
the Paul H. Nicze School of Advanced Internadonal Studies, where I am sur- 
rounded by colleagues whose knowledge and experience of Italy are greater than 
mine. For their kindness in reading several chapters and suggesting improvements, 
I wish to thank Vera Zamagni, John Harper, Gianfranco Pasquino, and Thomas 
Row. Others who have been generous with their knowledge of Italy include 
Fernanda Minuz, David EUwood, and Adrian Lyttelton. Several friends from the 
Facolta di Bologna have provided me with insights and information: Marco 
Cammelli, Filippo Cavazzuti, Carlo Guarnieri, and Piero Ignazi. I also wish to 
thank Gianfranco Brunelli, Valentino Di Leva, Geoffrey Dyer, and Eric Jones. 



Preface "xv 

Under these circumstances the conventional phrase that all errors are the 
author's responsibility takes on fresh meaning. I am also responsible for all 
opinions and judgments. All translations from Italian to English are my own. 

Several Bologna Center students have helped me dig out information: 
Barbara Matusik, Zach Messitte, and David Riggs. 

I wish to thank the Nitze School and the Bologna Center for granting me 
a sabbatical semester in 1994 during which much of this book was written. 
Robert Evans, the Director of the Center, has been unfailing in his encourage- 
ment, as has David Calleo, the Director of European Studies at the Nitze 
School. The Center's library staff has been helpful and efficient and I would 
also like to express my gratitude to the staff of the Istituto Gramsci of Bologna. 
Meera Shankar's skills were invaluable in producing the final version of the 
manuscript. 

Zaki Laidi not merely enabled me to publish this study in French, but 
also stimulated me to write it. 

Finally I wish to thank my wife, Veronica, and my daughter, Kate, for 
putting up with me. 

— Patrick McCarthy 
Bologna, January 1995 



1 



Corruption and the 
Overworked State 



By the end of 1 994 Italy had lived through three years filled with many kinds 
of turmoil. Hundreds of her politicians had been charged with taking 
bribes. The man who incarnated the postwar political order, Giulio Andreotti, 
stood accused of working with the Mafia, while the party that dominated that 
order, the Democrazia cristiana (DC) had all but vanished. Italy's most famous 
companies. Fiat and Olivetti, admitted offering bribes to obtain public con- 
tracts. A leading exponent of family capitalism, the Ferruzzi of Ravenna, saw 
its empire disintegrate, while another company, Fininvest, had tried to take over 
the government. A country that had always flaunted its Europeanism had seen 
its currency forced out of the European Monetary System (EMS). If many of 
these developments were unwelcome, there were also successes: a serious 
attempt was made to deal with the huge public debt; a privatization program, 
which included Italy's leading bank, the Banca Commerciale Italiana (Comit), 
was underway; the head of the Mafia, Tot6 Riina, had been arrested. Moreover 
a new electoral system was installed, which worked fairly well in March 1994, 
creating two broad coalitions of Left and Right in place of the many small 
parties, and gave to the Right coalition a majority, albeit an unstable one. 

No one thread can guide us through this labyrinth of change. One could 
argue that behind the sound and fury of magistrates closing prison doors behind 
politicians lay a process of economic modernization, which began earlier but 
had been blocked by the old political system. This offers a plausible interpreta- 



2 THE CRISIS OF THE ITALIAN STATE 

tion of the governments led by Giuliano Amato (from 1 992 to 1 993) and Carlo 
Azeglio Ciampi (from 1993 to 1994). One could also argue that behind the 
sound and fury there lay nothing at all and that Silvio Berlusconi's government 
(from May to December 1994) represented a restoration of the postwar regime. 
^) ,'The simplest way to begin is to consider the most famous of these events, 
the public contracts auctioned off by the political class. As the Clean Hands 
investigation launched by the Milan magistrates revealed, this was no ordinary 
corruption case for at least two reasons'. First, the number of inciderits was so 
great as to indicate that bribery was the norm rather than the exception. Second, 
the auctions formed part of a system without which the political order, as it 
existed from the 1950s to the 1990s, could not survive. 

This special brand of corruption was widely known before the Milan 
magistrates began to expose it. It had a name— clientelism; journalists and 
political scientists had demonstrated that it was an integral part of the postwar 
setdement, while historians had explained that it flourished a century ago. Italy 
has just "celebrated" the hundredth anniversary of the Banca Romana scandal, 
which involved leading politicians such as Giovanni Giolitti and Francesco 
Crispi in the near-demise of the bank.' 

^^ Immediately three questions arise: Why has clientelism suddenly become 
a subject of scandal? How did it assume such importance in the postwar period? 
Why do its roots go so deep? One answer to the first question looks outward: 
~^'"The end of the Cold War has enabled Italy to get rid of a political class that 
seemed to be eternal."'^ This is certainly true in that the collapse of the Soviet 
empire prompted the Partito comunista italiano (PCI) to change its name and 
perhaps also its identity between 1989 and 1991. That removed the DCs role 
as a bulwark against Communism and hastened its decline. 

However, world time and national time do not move in harmony. The 
PCI had been seeking a new identity since the end of the historic compromise 
in 1979, while the DCs share of the vote dropped more in the 1983 elections, 
when East-West relations were tense, than it did in the 1992 elections. It would 
be more correct to say that the interplay of national history and the East- West 
confrontation created a political settlement in 1948 that grew into a stable order. 
After going through various phases, in the 1980s this order began slowly to 
crumble under both international and domestic pressures (such as the increasing 
independence of northern Italian society). These pressures erupted in the 
volcano of events in 1992 through 1994. 

Systemic clientelism was a vital element in this order. Simply defined, 

\// clientelism means the plunder of the state by one or several political parties and 

1^ the simultaneous use of the state to plunder the private sector. Clientelism 

' depended on and spawned other traits of the postwar order. The most important 



Corruption and the Overworked State 3 

was the domination by one party, the DC, and the lack of alternation of parties -^f 
in government. Other traits were the fragmentation of parties and interest 
groups and a strong Communist Party. The postwar order was coherent and it 
evolved both in response to international pressures, which constituted one of 
the several reasons for the exclusion of the PCI, and partly according to its own 
logic. The Partito socialista italiano (PSI) learned from the DC and then outdid 
its mentor in plundering. The occupation of public and private space by the 
parties of government led them to strike bargains with most groups in society. ~\^ 
Segments of the DC came to terms with the Mafia and traded a degree of 
impunity for votes. 

Yet it would be wrong to imagine that this order was wholly bad. It was 
democratic, if imperfectly so. The quarter or third of the electorate that voted 
Communist saw its representatives barred from government, but they held 
power at the local and regional levels and from the 1 960s on they were consulted 
on many national issues. The PCI itself was a heretical Communist Party, 
although less heretical than some kind observers pretend. The political order 
fostered enormous if unbalanced economic growth and the DC softened some 
of the tensions it brought with it. There is a thin line between certain kinds of 
clientelism — especially the southern Italian version — and mediation. 

The basic foreign policy choices, which were as much made by Italy as 
forced upon her, were correct. Membership in NATO brought security cheaply, 
while the decision to break with Fascist autarky and to move toward European 
unity and the open world economy can hardly be faulted. The manner in which 
this long march was organized may be criticized and certainly the price was 
high. In the 1950s rapid industrial growth, export-led and concentrated in the 
North, maintained the historic gulf between North and South, strained big 
cities like Milan and Turin, and alienated the workers. They presented their bill 
in the 1970s when social tension ran higher in Italy than in Britain or France. 

Repeatedly Italian society devised ways to adapt to European Community 
(EC) requirements. When the government entered the EMS in 1979, it won 
the concession of a wider band. In the early 1980s industry — especially small 
industry — was flexible enough to switch exports from Germany, where the 
enforced stability of the lira against the mark made them more expensive, and 
toward the United States, where the high Volcker dollar made sales easier. 

In 1992 adaptation was more difficult. At Maastricht, Italy had commit- 
ted herself to bring government debt, which was running at more than 100 
percent of GDP, down to 60 percent. High German interest rates forced Italian 
rates up, worsening the debt and causing a run on the lira, which then had to 
be protected by even higher rates. In September 1992 the parties of government, 
which had derived prestige from Italian participation in the EC, suffered the 



4 THE CRISIS OF THE ITALIAN STATE 

humiliation of watching the Ura drop.Qut of the EMS. Meanwhile EC measures 
to reduce surplus steel forced closures and cut backs at Taranto in the vulnerable 
South. Symbolically the Bagnoli plant, opened in 1908 as part of the attempt 
to industrialize the South, was closed under EC pressure some 80 years later. 

Italy responded with another burst of modernization: the privatizations, 
the Fiat restructuring, and the expansion of the stock market are examples. The 
Employers Association, small businessmen, and the expanding urban middle 
class of Lombardy and much of the North had begun in the late 1980s to wonder 
whether Italy could continue to affprd such an expensiye political class^ Their 
protest took various forms: support for electoral reform to shift power from the 
party secretaries to the voter, demands for administrative decentralization, and, 
most important, the rise o£the NorthernJLeague^ 

So the Clean Hands investigation is best understood as the eruption of a 
regime crisis.^ It is not really a moral issue, certainly not the moral revulsion of 
a "good" people against "evil" leaders. Daily life in Italy is marked by a diffuse 
micro-illegality, of which tax evasion is the most obvious manifestation. One 
estimate is that more than $300 billion in revenue goes undeclared each year. 
Salary earners succeed in hiding only 6.5 percent of their earnings, but the 
self-employed conceal 59 percent of theirs. Conversely people have to buy goods 
to which they are entitled as citizens from bureaucrats and politicians. A driver's 
license, a hospital bed, or a residence permit may frequently be obtained without 
unreasonable delay only by offering cash. In a characteristic confusion of state 
^and market, state representatives have set up a false market.'* 
'^'^ Similarly incipient clientelism is present in the way Italians use personal 

contacts to avoid going through the usual administrative procedures. Bureau- 
cratic delays are circumvented by mutual favors. Such behavior is inseparable 
from the good personal relations that are such an attractive feature of everyday 
Italian life. Moreover I do not wish to suggest that Italians disregard morality 
or are all equally dishonest. The political class is the most to blame because it 
exercises the greatest power, and the moral sensibility of many Italians was 
apparent in their furious reaction to the Amato decree of March 1993 and the 
Berlusconi decree of July 1 994, which undid the work of the Milan magistrates. 
Other elites, such as the business community, bear their share of responsibility. 
My aim is to demonstrate that the real issue in the Clean Hands investigation 
is the systemic clientelism associated with the postwar order. 

Clientelism became systemic in the mid-1950s, when the DC could^no 
longer rely on anti-Communism to win elections and also wanted a nrieasure of 
independence from the Church. Its solution was to buy support by taking over 
state resources and channeling them to its voters. This process worked, and the 
next step, taken in the late 1950s, was to expand the nationalized sector to 



Corruption and the Overworked State 5 

provide fresh resources. Since clientelism consumes legitimacy by reducing the 
state's ability to arbitrate and since there was no alternative governm£nt to place 
a check on the DC, the process continued and grew. The next phase, associated 
with the nationalization of the electrical industry in 1964, was to place a tax on 
the private sector whenever it did business with the state sector or used the state's 
services. By the 1980s, the PSI had grown strong enough to impose its own 
taxes and there came a period of competitive clienteUsm. At this point Enrico 
Berlinguer could declare that the moral question had become the dominant 
political question. Clientelism was the core of the regime so the Clean Hands 
campaign marks Italian society's attempt to break with the degeneration of the 
postwar settlement. It is unlike the Watergate investigation that purged the 
aberrations of the U.S. political order, leaving the order intact. 

Two examples will suffice to demonstrate this. Although the Milan 
magistrates began their inquiries before the 1992 elections, there can be little 
doubt that, had the ruling DC-PS I coalition won a decisive victory, the 
investigation would have been blocked, as previous investigations had been. 
The second example is the behavior of the magistrates themselves. Previously 
they had splintered and formed alliances with the factions of the political class. 
Indeed many of them have been accused of contributing to corruption: Corrado 
Carnevale has supposedly protected the Mafia, and Diego Curto played a role 
in the Enimont intrigue where Raul Gardini paid huge bribes to politicians in 
order to sell his share of a chemical venture back to the state. The magistrates 
took action in 1992 because they saw that the political class was weak and that 
they could act with impunity. That Milan should take the lead was logical. The 
PSI city government, dominated by Bettino Craxi's friends and relations, had 
flaunted its dishonesty. This provoked the dual response of a Lega surge, which 
resulted in the 1993 election of Marco Formentini as mayor, and a legal 
onslaught led by Antonio Di Pietro, who has been depicted, in the best 
traditions of Italian populism, as a Molisan peasant, but behind whom stood a 
corporation that understood that its allies were about to collapse and that it 
must seek a new role. 

If clientelism was characterized by a desperate need to grow because it was 
simultaneously self-destructive, then the distinguishing trait of the old regime 
was its penetration into every nook and cranny of Italian life, where it encour- 
aged illegal activity. The magistrates have mown down elites, some of whom 
have incurred greater public censure than others. The political class was the 
primary target: Craxi, who had killed the goose that laid the golden eggs, was 
too naively arrogant to last long; Andreotti, "Alcide De Gasperi's heir," resisted 
better but was accused of more serious crimes. The civil service could not escape, 
not even the Ministry of Foreign Affairs where diplomats and administrators 



6 THE CRISIS OF THE ITALIAN STATE 

have been accused of making profits out of Italian aid to the Third World. Next 
came the representatives of the state sector, such as Gabriele Cagliari, who 
committed suicide; then the great private economic dynasties and Raul Gardini, 
who also committed suicide. Enimont posed the difficult question of the 
"publicized " economy, while the Ferruzzi collapse raised the separate if com- 
plementary issue of family capitalism. Cesare Romiti and Carlo De Benedetti 
made their acts of confession and have — so far — been forgiven. 

The private sector has been allowed to plead that it was a mere victim of 
the old regime. This is dubious, for Gardini considered that bribes were normal 
and he paid them "in order to establish regular, reliable dialogue with the 
political system." When Fiat's construction subsidiary, Cogefar, was found to 
have paid bribes to obtain public contracts, Romiti waited and then con- 
demned the political parties, while offering to cooperate with the magistrates 
and furnish them with documentation. In February 1994 the documentation 
turned out to be incomplete and a top Fiat manager was fired for suggesting 
that Romiti knew more than he was revealing. The notion that bribes were 
exacted from helpless companies hardly fits the conflictual but symbiotic 
relationship between the private sector and the state. Nor can one help 
remembering that Fiat's founder, Giovanni Agnelli, offered to finance the 
Turin Fascist Party and that Vittorio Valletta, who ran Fiat for decades, was 
known to distribute largesse. 

However, the employers' pleas, the economic shortcomings of the DC- 
PSI coalitions, and the hardship created by the world recession enhanced the 
prestige of the entrepreneurs and helped Berlusconi win the 1994 elections. The 
charges against the Minister of Health, Francesco De Lorenzo, left the medical 
profession untouched but brought into fresh disrepute the public health service, 
whose inefficiency had already provoked a flood of protest. So Clean Hands 
worked against the state, which was fair but had far-reaching consequences. De 
Lorenzo's cohort Duilio Poggiolini, a fairy-tale villain with a shrewish wife and 
a chest ftill of gold, was a doctor, academic, and bureaucrat. Only the last 
category was discredited by him. 

One of the most intriguing cases is soccer, where the stadiums built for 
the 1990 World Cup involved much bribery and where the owners of the 
Rome, Lazio, Turin, and Naples clubs have all been investigated. Yet enthu- 
siasm for soccer has, if that can be possible, increased. Not only did Italians 
follow the 1994 World Cup with passion and anguish, but Berlusconi turned 
his ownership of AC Milan into a key theme of his electoral campaign. That 
he stands accused of having paid part of star player Gigi Lentini's transfer fee 
in Switzerland to avoid taxes was forgotten as his team won the European 
Champions Cup shortly after he won the election. As the Italian elites were 



Corruption and the Overworked State 9 

mown down, soccer emerged as a form of populist patriotism. Franco Baresi, 
the great defensive player, was more of a hero than ever because Craxi had 
become a pariah. 

One of the rare elites to emerge unscathed was the upper echelon of the 
Bank of Italy, which explains why its president, Carlo Azeglio Ciampi, became 
Prime Minister in 1993. For the rest there seems no reason why the Clean 
Hands investigation should not go on forever. In June 1994 a new continent 
of corruption was discovered: some of the taxation police had systematically 
taken bribes from companies, which they then allowed to make false tax returns. 
This also involved allowing companies to conceal the names of their real owners. 
Since the firms were receiving illegal goods for their bribes, it became harder 
than ever to believe they were mere victims. Many of the bribes had been 
distributed after the Milan magistrates began their investigation, which indi- 
cates how tenacious the practice had become. 

In an especially dark cranny of Italian society lived the Secret Services. 
The army chief of staff. General Canino, resigned amid rumors of plots against 
the government, and revelations that high Secret Service officials had lavished 
funds, supposedly designated for clandestine missions, on themselves and their 
lovers. Although comic, this had a sinister side because the Secret Services were 
a pillar of the postwar order. They were the government's weapon against 
subversion but also against the legal activities of the PCI. Elements in the Secret 
Services had ties both with right-wing terrorism and with the Mafia, as the trial 
of the government official Bruno Contrada revealed. 

A thorough investigation of the Secret Service archives might throw light 
on the many mysteries of the old order such as the bombs placed at Piazza 
Fontana in 1969 or at Bologna station in 1980; right-wing conspiracies like the 
Rose of the Winds, which flourished in the 1 970s; the police's puzzling inability 
to rescue Aldo Moro in 1978; and the nature of CIA involvement in Italian 
affairs. Some Secret Service members understood that Clean Hands was no 
ordinary investigation of corruption but the instrument of regime crisis. Having 
much to lose, they counterattacked by making charges against a string of Interior 
ministers — a post occupied by the DC for the past 47 years — including the 
incumbent, Nicola Mancino, and the President of the Republic, Oscar Luigi 
Scalfaro. 

The logical explanation is that, while unable to execute a coup, this 
element of the Secret Service wanted to block the transition to a new regime. 
Scalfaro had pledged there would be early elections, but if he were indicted and 
forced to resign, the elections would be postponed. The Secret Servicemen who 
made the accusation that Scalfaro had taken money, Riccardo Malpica and 
Maurizio Broccoletti, were not men of great substance — it is intriguing that no 



^ 



8 THE CRISIS OF THE ITALIAN STATE 

more serious attempt was made to save the old order — but their action serves 
as a further proof of what was at stake. 

After Unification, Benito MussoUni's seizure of power in 1922, and the 
Republic created after his fall, a new regime was struggling to be born. By 
sweeping away the political and administrative elite and demonstrating how 
most other elites had collaborated, the Milan magistrates were unwittingly 
preparing the ground for the fourth attempt to (re-)found the Italian state. The 
' end of the Cold War, the need to modernize the economy, the emergence of 
social groups that considered the postwar order too expensive and too ineffi- 
cient, and perhaps most of all its own excesses were bringing the old order down. 
There was a demand for citizenship, which found expression in the pressure for 
an electoral system that gave more power to the voter, and that helped inspire 
the anti-Mafia campaign. 

All this does not mean that the bid to create a new regime will succeed or 
that it will mark an improvement. On the contrary it has been argued that it 
will fail, as did the three others. Italy has always, so the tale runs, been^overned 
by blocs that either exclude or else embrace and stifle opposition. Eventually 
j;hey collapse beneath their internal contradictions, but the forces that compose 
them re-emerge and govern under new names. "^ Another commentator sums 
up: "behind all the innovations of two years of crisis the old principle of change 
without change re-emerges, massively victoriously."^ 

This view, which is associated with Giuseppe Tomasi Di Lampedusa's 
novel, The Leopard,^ underestimates the changes in previous shifts of regime, 
such as Mussolini's suppression of democracy or the postwar shift to Catholic 
rule. Such a fatalistic interpretation, which tends to become a self-fulfilling 
prophecy, blinds observers to Italy's dynamism. The postwar economic trans- 
formation was, despite its distortions, a great adventure, x- - 

Certainly there was continuity throughout the earlier regime shifts. For 
example, the Liberation the bureaucracy and the entrepreneurial class survived 
unscathed. So this time the democracy and relative prosperity of the Republic 
will — one hopes! — remain intact. Less desirable elements of continuity are 
likely: it is hard to imagine that the Mafia, the Camorra, which runs crime in 
Naples, and the ndrangheta, which operates in Calabria, can be obliterated. 
/' Moreover some actions by the Berlusconi government, such as the onslaught 
on state television, the reluctance to embrace austerity, and above all the attempt 
to block the Clean Hands investigation, provide compelling arguments for the 
believers in change without change. 

Yet Berlusconi's government lasted only seven months and segments of 
Forza Italia (FI) resisted Fininvest, which never quite managed to take over 
the government. Admittedly it may yet succeed. A key issue is the long-sought 



Corruption and the Overworked State 9 

electoral reform: the switch from full proportional representation (in which 
the number of seats a party obtains is directly determined by the number of 
votes it receives nationally) to the British, winner-take-all, constituency-based 
system for 75 percent of the seats, with proportional representation limited to 
the remaining 25 percent. Critics who argue it has produced the old squab- 
bling, weak coalition government might remember that the French Fifth 
Republic's voting system, introduced in 1958, did not produce coherent Right 
and Left blocs until the parUamentary elections of 1967, that it took five years 
to complete the new constitutional arrangements, and that 23 years were 
needed before there was alternation of parties in power! The trend away from 
a plethora of small parties has begun in Italy, further electoral reform is much 
discussed, and Massimo D'Alema, the new secretary of the ex-PCI, the Partito 
democratico della sinistra (PDS), has given priority to the formation of a broad 
Center-Left coalition. 

Moreover Berlusconi's attempt to take over state television, the Bank of 
Italy, and the magistrates encountered strong opposition from public opinion. 
The "fax people" remembered that government by clientelism meant tht^^sp^ 
occupation of the state by parties and lobbies, which then expanded the state's 
power over the economy and throughout civil society. Many right-wing voters 
had hoped that Forza Italia's neoliberalism and the Lega's federalism were 
instruments to push back the invasion of the overbearing state. 

The programs of FI and of the PDS demonstrate that Right aurid Left alike 
sought a state that was strgng^because, to borrow Michel Crozier's term, it was 
modest. Shorn of its huge public sector and bureaucracy, it would delegate 
financial power to the regions and organize a genuine market economy. 
Governments with secure majorities based on fewer and less faction-ridden 
parties would be better able to bargain in fora like the European Union at a 
time when the state's role as negotiator has grown more important. Such at least 
are the aspirations. 

Whatever the outcome, it remains true that the fundamental problem 
during the last three years has been the state. Since its formation it has fallen 
short in its two duties of representation and efficiency. It has been "besieged": 
deprived of broad support and facing strong enemies, such as the Catholics in 
the post-Unification period.^ Unable to project its national project outward on 
a population, many of whom did not feel themsplyes to be its citizens, it 
protected itself from them with a large but defensive bureaucracy. 

Such a state had various options, none of them satisfactory. It could resort 
to authoritarianism, as Mussolini did; it could win tainted support by clientel- 
ism; it could simply remain absent, as the Liberal state did in most of southern 
Italy. To these various faces of the state — authoritarian, overbearing, and 



10 THE CRISIS OF THE ITALIAN STATE 

absent — the governed responded with fitful rebellion (Southern banditry in the 
post-Unification years), with absence of their own (a reliance on the black 
economy), or with offering tainted support by forming clientelistic networks. 
These were confrontations between non-citizens and a non-state. The govern- 
ment had to compete with other foci of loyalty like Moscow or the Vatican, 
while the individual found other communities like the family. 

Unity is all the more sought after because it is rare. There is no English 
equivalent of the tessitore, the politician who knows how to weave together a 
political alliance, because British and American parties dissolve less easily into 
factions. It is equally hard to translate stare insieme, which is a more intense 
experience than "being together. " The individual, perhaps because he is not a 
full citizen, needs a community. 

Such generalities are of limited value, and it is more important to stress, 
against the Lampedusian pessimists, that the problem of the Italian state is not 
crippling. Each country has its Anomaly. Italian commentators tend to admire 
the strong French state, which French observers often consider remote, over- 
centralized, and hence weak. A country's defects are the reverse side of its merits. 
The absent Italian state has impawned a race of small entrepreneurs, whom 
Britain, whose citizens demonstrate astonishing loyalty to their state, might 
envy. In any case the Italian state was not absent when confronted in the 1970s 
with left-wing terrorists; it dispatched them fairly efFiciently. Similarly a strong 
sense of citizenship was present among the Resistants of World War II. Nor has 
postwar Italy been without "state's men": Alcide De Gasperi, Enrico Berlinguer, 
and Ugo La Malfa are merely three examples. 

Yet the^problem of the state remains and is illustrated by a historical 
coincidence.' In the spring of 1 979 the historic compromise, the postwar order's 
last attempt to correct itself by including people in the government who 
represented the excluded one-third of the population not ridden with clientel- 
ism, collapsed. /At that precise moment the general public had the opportunity 
to read Salvatore Satta's novel. The Day of Judgement. Its hero, Don Sebastiano, 
is a notary and hence the representative of the Liberal state in Nuoro. However, 
he perceives the state as a magical realm, where the king and his ministers are 
beyond all criticism and where the notary's stamp is a sacred object that he 
wields with awe. As the book advances Nuoro changes, but no more modern 
sense of the state emerges. Instead society disintegrates like Don Sebastiano's 
family, and his only genuine contact is the feudal bond that ties him to his 
farmer, Zio Poddanzu. 

Satta's novel illustrates the difficulty that his fellow Sardinian, Berlinguer, 
had failed to overcome. To examine it in a historical perspective we must glance 
at the period after Unification. 



Corruption and the Overworked State 11 

THE STATE— OVERBEARING OR OVERWORKED? 

The Italian state was condemned to interventionism. Italy's industrial weakness 
left her with no option but to supplement private initiative with public mone^,„ 
government contracts, and protectionism. Steel is one of many examples. In 
1911 after a series of difficulties, a private consortium was formed to take over 
the Bagnoli, Piombino, and Savona steel plants and it was guaranteed subsidies 
and increased tariffs. State intervention often brought about improvement and 
post-Unity Italy's economic record is respectable. The Banca Romana scandal 
was possible because banks had the right to issue money; afterward issuing 
money was entrusted, with certain exceptions, to the newly established Bank of 
Italy and proceeded in a more orderly manner. 

Although the dearth of entrepreneurial skills has been much exagger- 
ated,'*^ Italian businessmen did turn too readily to the government and a vicious 
circle was set up. Unabl e to survive on its own, privat e indjjstry^formed powerful 
lobbies to deman^^public help. Even when the results were less disastrous than 
the tariffs that provoked the commercial war with France between 1886 and 
1 890, the effect was to weaken the state's ability to act as an independent arbiter. 
Its intervention was excessive and incoherent. Meanwhile the private sectoil 
failed to develop into a strong capitalist class capable of running a large number 
of big industries on its own. It had successful companies like Ansaldo and banks 
like Comit, and perhaps more should not have been expected. But private 
industrialists continued to rely on a state that could not respond satisfactorily. 
In turn this damaged their confidence in the Rome governments. So the 
political class had too little autonomy from the entrepreneurial class and yet 
succeeded in weakening it." That the new industries, such as chemicals and 
electricity, required complex organization, made public-private cooperation 
even more difficult. World economic time was not kind to the new nation. 

Statejresources were limited by the national debt, which stemmed from 
the wars of Unification. In 1866 revenue covered only 40 percent of public 
expenditure and government paper had to be floated at the exorbitant interest 
rate of 8 percent. The problem was exacerbated by tax evasion. Although a kind 
of progressive income tax was introduced as early as 1864, indirect taxes on food 
fell most heavily on the poor and a tax on grinding wheat and corn provoked 
one of many rebellions in 1869. Despite this the Right, which governed the 
fledgling state for the first 15 years, performed well. 

The state's narrow social base and its inability to win the allegiance ofjche 
jTiasses were identified by Antonio Gramsci as its greatest weakness. It was an 
inherited problem: from the eighteenth century on, the southern peasants 
watched the enclosure of common land; in the Napoleonic years they were 



12 THE CRISIS OF THE ITALIAN STATE 

promised that it would be given back but, since this never happened, they felt 
for all governments, including their new Italian masters, a profound mistrust. 
Tomasi Di Lampedusa depicts their skepticism in 77?^ Leopard hut overstates 
their passivity. For example, Giuseppe Garibaldi's landing in Sicily was accom- 
panied by peasant uprisings, which he put down. 

Camille Cavour, the first Prime Minister of the new state, never visited 
the South, which correctly saw in Unification yet another foreign conquest. 
The big landowners formed an alliance with the northern industrialists and 
-L obtained tariff barriers to protect their grain. Southern industrialists suffered 
from northern competition and the masses were ignored by the government 
except when taxes and military service fell due. The Mafia existed long before 
Unification but it assumed a more organized form at this point. ~ 

After 1860, or more correctly after 1876 when the Left that was already 

^'^'dominant in Sicily came to power in Rome, the state imposed an authoritative! 

rule even as it talked of democracy and citizenship. The ruling class, made up' 

of the old landowners but also of the new middle class that had bought up 

i Church land, bought protection from the Mafia. While acting as a mediator 

Ji between the rich and the poor, the Mafia was already an autonomous force with 

\ a variegated social structure, active in Palermo as well as in the countryside. Its 

presence was made possible by the absence of the state, its "opponent, model 

and accomplice."'" 

The state was absent in the South because it was overworked in the North. 
Even here and in the Center it had to struggle to create citizens. In 1860 the 
masses did not speak Italian, but dialects, while in Turin the traditional language 
\// of the court was French. Local traditions, in part the legacy of the city states, were 
^^ powerful. Yet Unification fostered in the northern bourgeoisie the sense of 
building a new Italian nation. This fueled the industrial ambition of Giovanni 
Agnelli and Vittorio Valletta: the / in FIAT stands for Italy and the T for Turin. 

The state found its philosophy in the neo-Hegelianism of Francesco De 
Sanctis and Benedetto Croce. Although he was criticized as undemocratic and 
reluctant to oppose Mussolini's seizure of power, Croce's view of the Italian 
state as a moral and intellectual force influenced two generations of educated 
youth. It led many of them to Marxism, which did not please him, and fostered 
anti-Fascism, which did. Neo-Hegelianism jostled with the disenchanted fatal- 
ism that was another legacy of the past but was reinforced by the state's fragility 
and has thrived since. That fragility also left a space to be filled by the many 
brands of populism, of which Gramsci's was merely the most sophisticated. 

More influential than Croce in shaping the state's economic role was Luigi 
Luzzatti, who believed that intervention was necessary in ordinary as well as in 
exceptional periods. Since he also championed cooperatives and mutual aid 



Corruption and the Overworked State 13 

societies, Luzzatti's thought penetrated CathoHc circles. The Church remained 
by far the strongest cultural influence. Even in an ex-Papal state like Romagna 
the people distinguished between the Vatican, which they hated, and the local 
clergy, whom they considered close to them. At the other extreme the Church 
was dominant in the Veneto, where it helped the peasantry to weather the 
1880's Depression. 

The weakness of post-Unification Italy is revealed by the most famous 
literary work it produced: Pinocchio (1880). The orthodox reading is that it is 
a parable of the state where the puppet becomes a citizen through acquiring a 
moral conscience. But the Marxist and Catholic readings are equally convinc- 
ing: that Pinocchio's urge for freedom marks his alienation from the new 
capitalist Italy and that Pinocchio cannot save himself but needs the help of the 
Fairy who represents Mary. In my opinion Carlo Collodi's book is an image of 
the state besieged by the Socialists and the Catholics. 

After 1876 the pitfalls of the state's narrow social base became apparent. 
The lack of parties with broad, active membership and clear programs meant 
that pairliament broke down into clans clustered around a chieftain. Holding 
pxiwer became more important than using power and cUentelism was rampant. 
The ambivalent need for and distrust of authority meant that liberar Italy 
oscillated between two kinds of leadership: compromising tacticians and self- 
proclaimed strongmen, such as Giolitti and Crispi. 

A comparison with the Third Republic is illuminating. In France as well 
politics turned into a game where, behind the labels of Right and Left, centrist 
coalitions were formed, overthrown, and rebuilt. Corruption scandals, such as 
the Panama affair, were frequent. However, a glance at the respective education 
systems reveals the difference. Whereas the Italian state schools made little 
impact because of inadequate funding and scant sense of mission, the French 
elementary schoolmaster exerted enormous influence. The French middle class 
may have chosen a limited state but it was, as Gramsci felt, a strong class. It beat 
back Boulanger and the anti-Dreyfus movement, whereas the Italian middle 
class could not do without Mussolini. The Third Republic pushed through a 
divorce law, whereas in Italy divorce was not definitively legalized until 1974. 

The role of the Catholic Church was very different in the two countries. 
Emile Combes's anti-clericalism was narrow-minded, but the break with the 
Church and the legacy of the (nowadays unjustly decried) Revolution gave the 
Third Republic a firm identity.] In Italy the Vatican resisted the birth of the new 
state and contributed to its demise. In 1864 the encyclical Quanta cura 
denounced modernity and liberalism. Although Cavour's disestablishment 
legislation made a distinction between upper and lower clergy — parish revenues 
were left intact while diocesan were not — the C hurch began tojupport peasant 



14 THE CRISIS OF THE ITALIAN STATE 

revolts in the South. After 1870, Pius IX, supposedly a prisoner in the Vatican, 
obtained a favorable interpretation of the laws that regulated the Church's 
financial situation. He still forbade Catholics to vote in national, but not local, 
elections. 

The result was that the Church competed with the state as a focus of 
people's loyalty. It exercised much influence within the state while refusing to 
"recognize it. Anti-clericalism was not strong enough to become the cement of 
the new Italy but it prevented Catholics from identifying with the regime. In 
1905 Catholics were allowed to vote. But although Giolitti tried to draw them 
into the political game with the 1913 Gentiloni pact, they entered when the 
game was being destroyed by universal suffrage and the post- 19 18 economic 
turmoil. The Partito popolare italiano (PPI), which maintained a certain 
distance from a Vatican that considered it an experiment, did not define its role 
as defending a Republic led by lay politicians like Giolitti and blessed with a 
strong Socialist party. It was outmaneuvered by Mussolini and abandoned by 
the Vatican. In 1922 the new Pope Pius XI opted for the Fascists over the PPI, 
which lamented the lack of Church support in the 1924 elections. The Vatican 
allowed Mussolini to break up the PPI and then struck an excellent bargain 
with him in 1929.'^ 

As one reviews the historic problem of the Italian state one is struck by 
the disparity between its exiguous resources and the demands made upon it. It 
was created by an efficient but small kingdom, which employed conquest, craft, 
aid from dangerously strong foreign powers, and an alliance with a scattered, 
brave but vague nationalist movement. The new state could rely on no national 
culture, whether defined by language or worldview. The organization that came 
closest to embodying such a culture, the Church, was its enemy. Soon after it 
was founded the new state was challenged by a Socialist movement, which, 
because the masses were divided and pre-political, took messianic forms (such 
forms were unthinkable in a state like Britain, where a strong, homogeneous 
working class operated within a long parliamentary tradition). Onto this state 
was placed the burden, imposed by world time, of turning Italy into a modern 
nation endowed with an industrial economy and a more than subsistence 
agriculture. To continue the work of Unification, colonies had to be acquired 
and a seat at the European councils had to be won. 

Unsurprisingly the Italian state was frenetically active as it sought to catch 
up. Because it pillaged one group to help another, it satisfied none. The strong 
plundered it and the weak fled it. It was absent and overbearing because it was 
overworked. It bequeathed to Fascism its dilemma to which Giovanni Gentile'^s 
answer was simple: "The State is the great will of the nation and hence its great 
intelligence. There is nothing it does not know and never does it remain aloof 



Corruption and the Overworked State 15 

from what concerns the citizen, whether economically or morally."''' By pro- 
fessing to offer such a solution Mussolini's regime aggravated the problem. 
Masked behind rhetoric for 20 years it again became the key issue in 1943. 

Of the state's two rivals in the years from Unification to Fascism, the 
Catholics were stronger than the Socialists. In the third phase of the state's 
history they would not stand aside and criticize. 



The Postwar Settlement: 
Catholic Hegemony? 



One indication that the years from 1992 to 1994 mark the end of the 
postwar order is the collapse of the Democrazia cristiana (DC). In the 
1992 elections the DC vote dropped by 4.6 percent from the 1987 figure to 
29.7 percent, which was around 20 percent below its landmark result of 1948. 
A target of protest even before the Clean Hands investigation, the DC was swept 
away by the magistrates' revelations. A splinter group had already formed: in 

1991 the ex-DC mayor of Palermo, Leoluca Orlando, began the Rete (Net- 
work) with Sicilian Catholics disgusted by their party's ties to the Mafia. In the 

1 992 elections the Rete, which had become a left-wing movement with a strong 
moral conscience, gained 1.7 percent.' 

In 1993 the DC split into three groups: the largest rallied around the 
party's new secretary, Mino Martinazzoli, who tried to clean house and who 
went back to the name Partito popolare italiano (PPI); a second band left with 
Mario Segni, the leader of the campaign for institutional reform, and eventually 
formed an electoral alliance with the PPI under the name Patto Segni; the third 
group abandoned Martinazzoli and, when Silvio Berlusconi entered politics, 
ran under the Forza Italia banner as the Centre cristiano democratico (CCD). 
A fifth band took the name Cristiano sociali and ran as part of the left-wing 
coalition, the Progressisti. 

The 1994 elections mark a Catholic diaspora. The group that went to the 
Right fared better than the two that went Left, for the CCD won 32 seats, 



18 THE CRISIS OF THE ITALIAN STATE 

whereas the Rete won 9 and the Cristiano social! 6. The PPI-Patto Segni 
remained at the Center and was hurt by the new electoral system. The two allies 
gained 11.1 percent and 4.6 percent respectively but were limited to 46 seats. 
In a situation as fluid as the Italian it is impossible to say even now that the 
Catholics are finished as an organized political force, but there is scant chance 
of their recovering their former dominance. 

The Church, so self-confident in the postwar years, stuck by "its" party 
but appeared not to grasp what was happening, much less what to do about it. 
Before the 1948 elections Cardinal Ildefonso Schuster of Milan had stated that 
"votes may be given only to candidates or lists of candidates who offer the surest 
guarantees that they will exercise their mandate according to the spirit of and 
following the guidelines of Catholic morality."^ The coded message to vote for 
the DC was repeated before every election up to and including that of 1992. 
Before the 1994 elections the hierarchy was ambiguous. 

Cardinal Camillo Ruini, the president of the Council of Bishops, harked 
back to the language of the postwar period when he asserted that "the soul of 
the Italian people, the cement of their unity and their greatest moral strength 
lie in their Christian faith. "^ He added logically that "the Church can in no 
sense give up propagating its moral and social teachings, even where they overlap 
with politics." But in the days that followed conflicting statements came from 
the Council, which defined the Church's role now as furnishing the faithful 
with general moral guidelines, or alternatively exhorting them to vote for 
Martinazzoli's party."* 

Certainly the bishops backed the attempt to reform the DC without 
splitting it. They punished Segni for leaving the party and helped guide him 
back toward it. In January 1994 Pope John Paul II declared that Catholics 
should be "united and coherent,"^ which was powerful language because 
"Catholic unity" had been another coded exhortation to vote DC. But again 
conflicting interpretations were given to the Pope's statement. As the elections 
drew closer Cardinal Ruini made a specific statement about the need for "a 
movement inspired by Christian beliefs,""^ while many diocesan newsletters 
endorsed the PPI and, albeit less warmly, Mario Segni's movement, the Pact. 

The Church was facing three problems. The most obvious was the decline 
of religion: in the postwar years around 70 percent of Italians attended Sunday 
mass; by the mid-1980s the figure was 25 percent.^ Then, too, fewer Catholics 
heed the Church's instructions on how to vote: one poll cited the lowly figure of 
15 percent.^ Many former DC voters deserted to the Lega in the 1922.elec tions. 
Finally, Catholic activists who still link politics with religion are infuriated by DC 
corruption. In 1991 they supported Segni's referendum on electoral reform when 
the hierarchy hesitated. The Rete had the backing of a group of Palermo Jesuits. 



The Postwar Settlement: Catholic Hegemony? 19 

After the elections Cardinal Ruini had kind words for Forza Italia, which 
had offered increased funding for Catholic schools in the name of choice. 
However Ruini was at once criticized by other bishops,^ and the Church, while 
it could discreetly press for an alliance between the PPI-Patto and the Right, 
could hardly abandon the PPI after calling on the faithful to support it. Pope 
John Paul seemed to suggest another option: the Church would speak out in 
its own right on political matters. '° 

The bishops had raised the question of whether the Church bore any 
responsibility for political corruption and concluded rather hastily that it did 
not. In fact the Vatican has not emerged unscathed from the Clean Hands 
operation. Dubious money from the drug companies financed its conferences, 
while its bank, Istituto per le opere di religione (lOR), was used to move funds 
around in the Enimont deal. These may appear to be minor issues but they force 
one to consider the Church's role in systemic clientelism. 

In general the hierarchy is likely to maintain considerable cultural influ- 
ence in Italy, but it will not play the linchpin role it played from 1943 to 1948. 
What of the Catholics' old antagonists and allies, the Communists? The PCI 
was transformed with partial success into the PDS between 1989 and 1991. In 
the 1992 elections the PDS won a disappointing 16.1 percent of the vote, while 
the breakaway group that wanted to remain Communist, Rifondazione com- 
unista (RC), was pleased with its 5.6 percent. The PCI-PDS's exclusion from 
government and the spoils thereof enabled the PDS to survive the Clean Hands 
investigation and in 1993 it was Italy's strongest party. However the Pro- 
gressisti, the left-wing coalition gathered around the PDS, were defeated clearly 
in the 1 994 elections as the PDS won 20.4 percent of the vote and RC 6 percent, 
while the Progressisti gained 215 seats to the Right's 366. 

So the PDS has taken up the role of opposition in the new parliament. 
Unlike the PCI it is not an illegitimate candidate to govern and the international 
constraint of the U.S. veto has vanished. However in an age where ideology is 
supposedly in decline, anti-Communism played a major role in the 1994 
elections. Explaining why he could not form an alUance with Occhetto, Segni 
cited the "Westernness" of his values. ' ' If this harked back to the 1948 elections, 
Berlusconi was far more explicit. He promised "show trials and prison" if the 
Left won and described the 1994 contest as a choice between "freedom and 
slavery."^^ Contemporary anti-Communism is very different — it appears to 
show that if the Communist does not exist, the anti-Communist will invent 
him — from the postwar brand. Its existence does not contradict my thesis that 
the years 1943 to 1992 form a historical period that has ended. 

We must now turn to the beginning of that period to examine its major 
protagonists and the kind of state they created.'^ Orthodoxy holds that events 



20 THE CRISIS OF THE ITALIAN STATE 

in Italy were shaped by their international context, namely, the nascent East- 
West conflict.''' I would like to suggest that Italians had more control over their 
destinies than is usually thought, that the most important "international" actor 
was the Vatican and that the U.S. role was decisive in maintaining the postwar 
settlement, but secondary in shaping it. 



AN ANGELIC BUT VERY DETERMINED PASTOR 

The last assertion must be considered first. A glance at the chronology of events 
reveals that four long years separate the overthrow of Mussolini in July 1943 
from the announcement of the Marshall Plan in June 1947. Even if we situate 
in mid- 1946 the American decision to consider the USSR a major threat that 
must at all costs be checked, we must still conclude that De Gasperi became 
Prime Minister in December 1945 and that the DC emerged as the largest party 
in the elections of June 1946 without massive U.S. backing. In fact the United 
States was slow to select the DC as its champion: De Gasperi's trip to 
Washington in January 1947 brought little financial aid to Italy, although more 
was promised at the moment when he dismissed the PCI and PSI from the 
government in May 1947. 

By the next year the United States was pouring in resources and simul- 
taneously threatening not to include Italy in the forthcoming Marshall Plan if 
the Left won the April elections. Since the Italian economy looked in sorry 
shape in 1947 this threat certainly widened the DCs margin of victory. The 
United States did not rule out direct military intervention in the event of a 
Communist uprising, although it rather saw itself supporting an Italian 
effort. '5 

From this moment until William Casey's intervention in the local elec- 
tions of 1985, U.S. governments deployed firm statements, economic aid, 
Hollywood's dream machine, illegal financing of friendly parties, and bagloads 
of dirty tricks to keep the PCI out of power. It is hard, however, to demonstrate 
that the Italians could not have achieved this on their own. 

Between 1943 and 1946 the United States had many policies and policy-mak- 
ers but it did not envisage Catholic hegemony. In the April 1 948 crusade the Vatican 
provided more battalions than the Americans. One feels that the DC exploited 
American and-Communism. Catholic unionists wanted to split off from the Com- 
munist-led Confederazione generale dei lavoratori italiani (CGIL) so the AFL-CIO 
put up the money. The United States lavished subsidies on Giuseppe Saragat's Social 
Democrats, who broke away from the Socialist Part)', in the hope of getting 



The Postwar Settlement: Catholic Hegemony? 21 

working-class support for the government, but the Social Democrats were never more 
than a useful, minor ally for the DC. 

The period from 1943 to 1946 was when the foundations of Catholic 
power were laid. In 1943 the existing order disappeared.'^ The coup of July 25 
dispatched Mussolini, while the armistice of September 8 led to the disintegra- 
tion of the army, the flight of the king, and the collapse of the Fascist state. All 
that remained was the war. 

Space permits only a few snapshots of the chaos, the details of which are 
well known. In Sicily, bandits, separatism, and the Mafia all grew stronger. 
During the Allied rule of Naples 60 percent of the goods that arrived at the port 
ended up on the black market. ' '^ Sardinia was cut off from the mainland during 
the winter of 1943-44. No coal was distributed, bread was rationed at 1 50 grams 
a day, and people ate grasses that they gathered in the fields. The division 
between South and North was reasserted, while Milan and Turin were aban- 
doned to the Wehrmacht and Allied bombing. 

Where there had been an order of sorts suddenly there was none. Gentile's 
statement ceases to be rhetorical and becomes ironic. It has been noted that the 
damage done by the war to Italian industry was relatively slight: no more than 
8 percent of the 1938 productive capacity.'^ But this fails to include the damage 
to roads, bridges, and railways, which made a direct impact on the population. 
Moreover the cultural disarray caused by the collapse of the 20-year-old regime 
was painful. On September 8, many people simply gave up and went home. 
The case of the young Pier Paolo Pasolini was typical. Rounded up by the 
Germans while he was serving with his unit near Livorno, Pasolini escaped, hid 
in a ditch, and then made his way across Italy to Friuli and his mother. 

The shock was all the greater because Fascism had been so pervasive. It is 
erroneous to assume that Mussolini's ineptitude, demonstrated by his decision 
to fight a war for which he had not prepared, had left space for other foci of 
loyalty. One proof is the lack of opposition. Until the war Mussolini had little 
to fear and opinion turned against him only as military defeats mounted. Even 
the Turin strikes of March 1943 began as an economic protest and then took 
on a political dimension.'^ 

Fascism compensated for its inefficiency by being many-sided. ^'^ It had 
forged alliances with industry and with the Church. Although it repressed the 
working class it offered at least some young workers in Turin their first taste of 
such modern pleasures as the cinema and soccer. When potential rebels arose 
among the educated youth, Giuseppe Bottai was dispatched to explain to them 
that their sentiments were a return to the original sources of Fascism. Indeed the 
example of culture reveals how difficult it was to oppose. Pasolini's early writing 
is a discourse of cultural opposidon that is striving unsuccessfully to become political. 



22 THE CRISIS OF THE ITALIAN STATE 

Only after July 1 943 does he realize there had been in him a "political man whom 
Fascism had wrongftiUy suffocated without my knowing it."^' 

The best commentary on the 1943-45 years is Satta's De Profondis. His 
pessimistic vision blinds him to the conflict between Fascists and anti-Fascists, 
but enables him to seize the disintegration. Freedom "cannot be reduced to a 
political or even a legal issue . . . each of us must conquer and preserve . . . that 
Christian liberty, which is based on self-denial." All human institutions, includ- 
ing the state, are built on individual effort, which has collapsed in Italy. Looting 
and trading on the black market are the marks of an "individualism which serves 
only itself and there are now "ten or twenty Italys or as many as there are 
citizens ... in the disintegration of the state each person becomes a state unto 
himself. "•^^ 

Vacuums are quickly filled. The mood of helplessness indicated one obvious 
solution to the question of who should run the country: foreigners. The arrival 
of U.S. troops, many of Italian origin, inspired the dream of America. Among the 
working class of northern Italy the myth of the USSR preceded PCI proselytizing, 
while socialism was associated less with Palmiro Togliatti's new party than with 
the arrival of the Red Army. Groups that were not helpless dealt directly with the 
foreigners. In March 1947 Vittorio Valletta, whom the Allies had helped back to 
power, drew up Fiat's shopping list and headed for Washington. The habit of 
appealing to foreigners to quash one's domestic enemies grew rapidly. In February 
1945 Vittorio Emanuele Orlando, the veteran right-wing leader, sent a memo- 
randum to American officials saying that the PCI "was in complete control" of 
the political situation.^^ Influential Italians pleaded helplessness in order to exploit 
the foreigner, not in order to be governed by him. 

The vacuum left by Fascism was filled by the Vatican rather than by 
the Allies. As Mussolini's ally, the Papacy could appeal to the segments of 
the population that had supported him. While he could lay no claim to 
and-Fascism, Pius XII had taken care to separate himself from the regime, and 
he had his own shock troops, the Catholic Action. He had earned respect by 
remaining in Rome when the king fled. The Church devoted itself to sheltering 
the population from the war. It tried to persuade the Allies not to bomb and 
the Nazis not to deport. 

It was inevitable that in the disintegration of their country Italians should 
turn to the Church. -^^ It was still the greatest cultural influence. "How can you 
not be a Catholic if you are born in Italy?" asked Federico Fellini. Bombing 
encourages prayer and Pius XII offered an emotional brand of religion replete 
with pilgrimages, processions, and miracles, which Fellini would chronicle with 
ironic sympathy in films like The Nights ofCabiria. Pius stressed devotion to 
Mary, whose Assumption into heaven would be proclaimed as doctrine in 1950. 



The Postwar Settlement: Catholic Hegemony? 23 

However if Mary was forgiving and if the processions provided a respite from 
fear, the main trait in Pius's strategy was authority. In the film Pastor Angelicus 
(1942) the Pope is presented as the supreme leader, a more authentic version 
of Mussolini. 

The Vatican had prepared for the demise of Fascism. In 1929, the year 
of the Lateran Pacts, Alcide De Gasperi was given a poorly paid post in the 
Vatican library. He was being held in reserve. The Church began to distance 
itself from Fascism after the 1938 Hitler-Mussohni agreement because of the 
Nazis' anti-Catholic policies. In 1940, Italy's entry to the war seemed to the 
Vatican a blunder and, as opinion turned against Mussolini, so did the Church. 
In his Christmas Day message of 1942 the Pope condemned racism. By now 
the ex-Popolari were regrouping. 

Not that the Vatican displayed any great liking for democracy. It toyed with 
authoritarian solutions: in July 1943 Catholic Action wanted to take over the 
Fascist organizations, which implies that some Vatican leaders were considering 
a post-Fascist government based on king-army-church. September 8 put an end 
to such dreams and in December Monsignor Domenico Tardini, a close advisor 
to the Pope, could write that "without doubt it will be necessary to return to 
democracy," although he added that "the Italians are not ready for a republic. "^^ 

The Vatican's willingness to oppose the restoration of democracy has 
probably been exaggerated, as have its doubts about the nascent DC and De 
Gasperi.'^ In December 1945 Tardini complained that the party had drifted 
too far to the Left, but as early as 1942 the Vatican began presenting De Gasperi 
to the Americans as a postwar leader, while in December 1945 Tardini urged 
them to help make De Gasperi a successful Prime Minister. The more difficult 
questions are what sort of democracy and what sort of state the Vatican wanted 
for Italy. One must consider the Pope's priorities and the Church's view of the 
state. 

On the first question, country time and world time ran together: the 
Pope's priority was the defeat of Communism. Reluctant to speak out against 
Hitler, Pius was ever willing to repeat that Communism was evil. The Vatican 
turned a deaf ear to Franklin D. Roosevelt's claim that he could integrate the 
USSR into a world order or persuade it to stop persecuting religion. As early as 
1942 Tardini was worried that postwar chaos would provide Communism with 
its chance. The Pope watched with growing alarm the spread of the Commu- 
nist-led Resistance in northern Italy and warned that trouble could result 
because the masses were "emotionally unstable and impredictable."^'' 

The Vatican feared the worst in Eastern Europe, but it was determined 
to prevent the spread of Communism into Western Europe and to limit 
Communist influence in Italy. To achieve these goals it wanted the United 



24 THE CRISIS OF THE ITALIAN STA TE 

States to remain in Europe, so in 1943 Tardini generously offered Italy to the 
Americans as "a magnificent base in the heart of Europe and of the Mediterra- 
nean from which to undertake both a civilizing mission and a vast economic 
operation." One may suspect that Tardini's faith in the U.S.'s ability to spread 
civilization was less strong than he pretended. The Vatican shared the Italian 
flair for exploiting helpful foreigners. 

In Italy the Vatican wanted the DC in power with the PCI confined to 
opposition. It would have preferred a monarchy, for it distrusted the concept 
of anti-Fascism and it disliked the Comitato di liberazione nazionale (CLN). 
The Vatican was tempted by alliances between the DC and the Right, including 
the Movimento sociale italiano (MSI) after it was founded in December 1946, 
but it was willing to admit that there were practical reasons for not making 
them. The Vatican was determined to retain the power it had gained in 1929 
and to have the Lateran Pacts (which gave the Church much power over 
education and marriage as well as much freedom from paying taxes), written 
into what, after June 1946, it recognized would be a Republican constitution. 

The prime problem with this plan was not that it was too right-wing. 
Historians of the postwar period dwell too much on the supposed lost oppor- 
tunity of creating a Social Democratic Italy.^^ From the way that the 1943 
vacuum was filled, the opportunity to create such an Italy was small, as I shall 
argue in discussing the Resistance, the PCI, and the postwar economic deci- 
sions. Our focus, however, is different: from the viewpoint of the 1 992-94 crisis 
the key question is why the third attempt to (re-)found the Italian state proved 
unsatisfactory. Neither Right nor Left has any monopoly on creating a state 
that is representative and efficient. The Vatican's vision was clear-sighted and 
doubtless it considered that it was helping create a strong Italy, endowed with 
religious and moral authority and capable of resisting international Commu- 
nism. In fact though it was creating a state that, while different from earlier 
versions, did not resolve their shortcomings. To explain why this was so, we 
must consider the Church's various views of the Italian question. 

During each incarnation of the state the Vatican's role was different. At 
Unification, it stood aloof and acted as an alternative focus of loyalty. During 
Fascism, it formed a wary alliance as it helped to legitimize the state, while 
gaining power through the Lateran Pacts. 

In the third phase, the Church was participating more and gaining more 
power. Whereas the Fascist Party had been a rival, the DC was virtually the 
Church's creation. Between the two lay a tiny space that De Gasperi would try 
to expand. But the dominant party of government in the new Republic was 
dependent on the Church's organization to get itself elected. Moreover, political 
legitimacy was subordinate to religious legitimacy, which resided in the Vatican. 



The Postwar Settlement: Catholic Hegemony? 25 

This situation was in harmony with the Church's teaching. The suppos- 
edly progressive Pope Leo XIII accepted democracy, but he considered it one 
form of social arrangement among many. It could not claim to represent right 
or justice, which were concepts enunciated by the Church. Following Aquinas's 
thought, the Church defined the common good and it demanded that govern- 
ments measure themselves against it.^^ In and of itself, this established the 
Vatican as the source of legitimacy, but two other factors strengthened its 
position. In the interwar period, an age of dictatorships, the Church became 
more dictatorial. Where Benedict XV had been modest, Pius XI was authori- 
tarian. The struggle against Communism took its toll. 

Although Pius XII accepted democracy, his Catholicism was a total 
worldview. When he saw a new social trend he sought to assimilate it: the cinema 
erupted into Italian life after the war and by 1950 one third of all cinemas were 
run by parish priests. It is easy to smile at Pius's obsession with the length of 
women's skirts but control of people's bodies is vital. The Church understood 
that, if it could set the rules of sexual behavior, it could easily set the rules of 
politics. 

The second factor was that the chaos of depression and wars reinforced 
the Augustinian notion of history as a battle against unflagging evil. Bringing 
to this struggle his personal pessimism, Pius XII considered most human 
institutions harmful and states among the most harmful. ^° There existed an 
incompatibility between the things of Caesar and the things of God. To Pius 
the new republic was undesirable but necessary: a barrier between himself and 
his faithful but a base from which to launch his international crusade against 
Communism. One is tempted to revise Cavour's statement and speak of a 
hegemonic church in a non-state. 

The affirmations made by DC politicians in favor of incorporating the 
Lateran Pacts into the Constitution show that they understood and accepted 
their subordinate position. Guido Gonella, who was Minister of Education in 
1946, calls for freedom of religion for the individual and then moves without 
transition to assert that Catholicism must be the state religion: "The fundamen- 
tal institutions of the state must be based on Christian ethics." Another 
spokesman refuses to restrict Catholicism to the private sphere or to admit that 
public institutions might be neutral. Either the schools teach religion or else 
they will be "areligious, which for practical purposes means anti-Christian." 
Giorgio La Pira, Giuseppe Dossetti's supporter, denied that there could be a 
lay state: Man had a religious nature and social institutions must reflect it.^' 

The supremacy of the Vancan over the DC was the prime cause of the 
new state's weakness. Instead of acquiring legitimacy through representation 
and efficiency, it received legitimacy from the papacy. Ultimately, this could 



26 THE CRISIS OF THE ITALIAN STATE 

only be the shadow of the legitimacy accorded to Pius. If to non-Catholics, of 
whom there was, despite Fellini's comment, a good number, such a state could 
only be a foreign body from which they were excluded, to Catholics it was a 
secondhand garment. The source of the DCs later systemic clientelism lies in 
this lack of sovereignty. If the state was legitimized only, but completely, by the 
Vatican, then the DC need demonstrate no sense of the state. From the 1950s 
on it would treat the public domain as its private property. The bishops were 
too hasty in refusing responsibility for political corruption. The looting of the 
Cassa per il Mezzogiorno was counterpoint to the cult of Mary. Such behavior 
by the party it endorsed troubled the Vatican only when it threatened the DCs 
ability to win elections. For the rest of the time, clientelism emphasized human 
frailty and the need for the angelic pastor. 

In practice the Vatican was more directly besmirched by corruption 
through the property speculation in Rome, which took place in the 1950s under 
the so-called Vatican's mayor, Salvatore Rebecchini, or through lOR's collab- 
oration with Roberto Calvi. But the papacy's greatest responsibility in the 
current crisis is that it removed from the DC the need to acquire legitimacy by 
running the state institutions fairly and objectively. The novelist Leonardo 
Sciascia offered a theological explanation in Todo Modo: the priest, Don 
Gaetano, who finds God in the contemplation of human stupidity, argues that, 
since Christ has come, all things are permitted to men. Sciascia's particular 
target in the DC was Giulio Andreotti, whose choice of friends — Pope Paul VI 
and Salvo Lima — indicated an affinity with Don Gaetano's sublime cynicism. 
The investigation of Andreotti's alleged Mafia ties is the most important single 
event in the present regime crisis. 

To place the prime responsibility for the troubles of the postwar settle- 
ment on the Vatican is not to condemn it. No other force could have filled the 
1943 vacuum. From its perspective — and from Italy's — it may have been right 
in according priority to the struggle against international Communism. Cer- 
tainly history, in the shape of Joseph Stalin, did litde to help the new Italian 
state. We must next look at the DC and the domestic political context. 



A PARTY IN SEARCH OF AN IDENTITY 

In the 1946 elections the DC had no control over the hierarchy or over its 
electorate. The Vatican delivered the vote with its doctrine of Catholic unity. 
Seventy-five percent of DC parliamentarians belonged to Catholic Action, 
which claimed 2.5 million members to the DCs 1 million. The party joined 



The Postwar Settlement: Catholic Hegemony? 27 

eagerly in the growing anti-Communist crusade. As early as 1942 De Gasperi 
had outhned to U.S. officials the plan for a postwar government that did not 
include the Communists.^^ ^^^^ing the 1946 elections the Pope invited Italians 
to choose between "over a thousand years of Christian civilization" and "a 
materialist state devoid of spiritual ideals, of religion and of God."" 

By now it was becoming clear that the Resistance, while politicians of 
many hues would invoke it as the Republic's moral base and while it was 
certainly the Republic's ideal, was not going to determine the Republic's reality. 
The strength of the MSI in the 1994 elections casts retrospective doubt not on 
the moral value of anti-Fascism but on its strength in the country. The notion 
of a renovating "Wind from the North" that somehow failed— because of Allied 
opposition, southern inertia, or Togliatti's skepticism?— to sweep away the 
failings of Italy's past, is only partly correct. All three opposing forces were 
present, but so were others, and the Resistance was too weak to overcome them. 

The Resistance was too small and it came too late. At the end of 1943 
there were a mere 9,000 partisans and not until 1945 did the number rise to 
100,000. By then the compromise with Italy's past was already taking shape. 
Like the French Resistance, the Italian movement possessed internal fissures 
that emerged once, or even before, the invader was defeated. Osoppo, where 
Pasolini's brother was killed, was only one case where the PCI and Partito 
d'Azione partisans came to blows. Although it acquired a mass following, the 
Resistance was not the expression of the entire working class, much less the 

entire nation. 

Since this was a civil war and a class war as well as a national struggle 
against the Nazis,^^ it provoked hostility from many in the business community. 
It dethroned Vittorio Valletta whom it later allowed back; it is hard to see how 
both actions could have been correct. The DC had been present in the 
Resistance— Enrico Mattel is one example among many— but most of its 
supporters stood aside from it. This helps explain why Mario Scelba, once he 
became Minister of the Interior in February 1947, removed Resistants from the 
public administration as fast as he could. 

The partisans personified the vision of a genuine national community: 
they were what the new state ought to have been. But their ethic of solidarity- 
citizenship at its best— was a projection of themselves rather than a national 
reality. This discrepancy lies at the heart o^'Agnese vaamorire, Renata Vigan6's 
novel about the Romagna Resistance, which reads quite differendy in 1995 than 
it did when Einaudi first published it in 1949. Agnese is driven to rebellion 
when her husband dies in deportation and she becomes a mother to the young 
partisans. So a link is made between the family and the Resistance network, 
which is to be the nucleus of the postwar social order. Yet Vigano notes that 



28 THE CRISIS OF THE ITALIAN STATE 

many working-class families and villages chose to ignore the Resistance and to 
collaborate with the Germans. Indeed she hints that the partisans are outsiders: 
one of them, La Disperata, is an orphan who loses his fiancee when her family 
discovers he has become a partisan. Moreover Agnese, who has lived in 
solitude — "for more than fifty years, her whole life, she had fended for herself 
and she expected little from others" — also dies alone. ^^ The novel thus fore- 
shadows the postwar failure to link the individual and the collective in the 
citizen-state dialogue. 

The Resistance's defeat came as early as November 1945. Its victories had 
increased the CLN's power until, after Germany's surrender, Ferruccio Parri 
became Prime Minister of a government that included the six Resistance parties. 
Parri, however, achieved little. In Carlo Levi's novel he is depicted as a saint 
who belongs to an imaginary Italy that is eternal, suffering and full of miracles. 
Both the Communist and Christian Democrat politicians are depicted as quietly 
pleased when Parri falls in November, the Christian Democrat with more 
reason — he knows that "he has the winning cards in his hand and his mind is 
at ease."^^ In December De Gasperi became Prime Minister. 

The Vatican had enlisted Allied support for De Gasperi and it was now 
that northern Italy was returned to Italian control. De Gasperi's was a generi- 
cally conservative government,^'' as was dictated by the two economic choices 
that were slowly and painfully being made: to internationalize the Italian 
economy and to do so by allowing the private sector to take the lead. Thus De 
Gasperi, who had talked of worker participation in industry, abandoned the 
works councils that the Resistance had created. A month after he took office 
the ban on laying off workers was partially lifted and in February 240,000 lost 
their jobs. However the exact nature of DC conservatism remained to be 
defined. Moreover, while it is correct to see an emerging alliance between the 
Catholic part)' and the lay northern industrialists, the two groups were very 
different. 

The DCs strength was demonstrated in the June 1946 elections. It won 
207 seats, while the PCI claimed 104, and the Socialists 115. By straddling the 
issue of republic or monarchy, De Gasperi preserved a large chunk of the 64 
percent southern vote for the monarchy. The emergence of the Fronte 
dell'uomo qualunque (FUQ), which won 30 seats, demonstrated a reaction 
against anti-Fascism and reminded the DC that there were votes to be won 
among the lower middle class that disliked — and exaggerated — the strength of 
the Northern Wind. 

The founding of the MSI and its relative success in the Rome local 
elections of October 1947 — 4 percent and three councilors — reinforced the 
lesson. Despite its left-wing Fascist leadership, the MSI's voters were the 



The Postwar Settlement: Catholic Hegemony? 29 

conservative southern lower middle classes — it grew as the FUQ flagged — and 
its overlap with the DC was demonstrated when the MSI Rome councilors 
backed Salvatore Rebecchini for mayor. The MSI was tenacious enough to 
survive 50 years of DC domination and to constitute a tenuous link between 
the Berlusconi government and Mussolini's regime. However, in 1947 it was 
yet another sign that Italian society was far less left-wing than northern and 
central Italy had seemed to be in 1945. 

Although this trend was working mostly for the DC, its success was 
threatened in the autumn of 1946. Inflation soared, but with the Communists 
and Socialists in his government De Gasperi could not deflate the economy, 
and in September the Liberal Treasury Minister, Epicarmo Corbino, resigned. 
Yet De Gasperi needed the Left for the signing of the unpopular Peace Treaty 
and for the parliamentary vote on the Lateran Pacts. Once these obstacles were 
overcome in February and March 1947 respectively, he could oust the Left from 
the government in May with the enthusiastic support of his party, the indus- 
trialists, and above all the Vatican. By now world time had caught up with 
national time and the U.S. authorities had finally learned the truth about the 
Soviet regime that the Vatican had been expounding to them since 1940. 
Marshall aid was announced and Americans took the responsibility for decisions 
largely made by Italians. 

What sort of party was it that, one year of excitement later, dominated 
the postwar settlement? There was no contradiction between its popular base 
and its conservatism: both the Gaullists and the British Conservatives enjoy 
strong support outside the middle and upper classes. Exponents of change 
without change who stress the continuity with Fascism are right that the lower 
middle classes, who had found in Mussolini a bulwark against working-class 
demands, now turned to the DC. But the political order was different: there 
were now elections and freedom of speech. 

The DCs alliance with the Northern lay capitalists did not make it the 
party of capitalism. It did not pass antitrust laws or modernize the stock market. 
The traditional pattern of a private sector that relied too heavily on governments 
it distrusted was continued. ^^ But this time the government had fewer ties with 
industry than in Giolitti's age and was more willing to intervene. The "publi- 
cized" economy was 25 years away, but the DC of 1948 felt no admiration for 
the market. 

On the positive side the DCs definition of itself as Catholic gave it 
flexibility with policy as well as in dealing with most of the many different 
sectors of Italian society. The old alliance between northern industrialists and 
southern landlords could not suffice in an age of mass democracy. In the early 
1950s the DC pushed through a moderate land reform in the South: it broke 



30 THE CRISIS OF THE ITALIAN STA TE 

up some of the big estates, whose owners received generous compensation, and 
it distributed the usually uncultivated land to small farmers. They received state 
aid via the Cassa per il mezzogiorno (a fund set up in 1950 by the government 
to promote development in the South). Social tensions in the South, where the 
battle for the land had broken out as soon as Fascism collapsed, were alleviated 
and a new version of the old alliance was formed. 

The DCs willingness to use the state was demonstrated by its decision to 
maintain and expand the nationalized sector. In the 1940s and 1950s it worked 
well: ENI is the best-known example, but it is also probable that Italy would 
never have developed a modern steel industry without the public sector, guided 
by Oscar Sinigaglia. 

The DCs virtues were pragmatism and mediation. In the tumultuous 
process of socioeconomic change that marked the 1950s and 1960s these were 
important virtues. The parallel with the post-Unification period is obvious and 
once more the Italian state was overworked. Good motorways were built but 
the rail network lagged. Social services were expanded but they were often 
chaotic. 

The defects of DC government in the period before the Naples congress 
of 1954 were the reverse side of its merits, because both may be traced back to 
the umbilical cord that tied the party to the Vatican. The DC excluded the 
groups in northern and central Italy from mediation who were not Catholic 
and who bore the brunt of the economic reconstruction. Toward them the state 
was overbearing, not to say authoritarian. Secondly DC governments mediated 
socioeconomic change but they did not direct it in either of the classical 
conservative ways: by dirigisme or by acting as arbiter of a liberal economy. 

The group that suffered most at DC hands was the northern and central 
Italian working class. Mario Scelba's use of the police during strikes and 
demonstrations went far beyond minimum force. In 1950 the shots fired into 
a Modena crowd, which had assembled to protest against factory layoffs, were 
no exception. Between 1947 and 1950 some 60 workers were killed by the 
police, while more than 3,000 were wounded in 1950 alone. ^^ 

Along with this went a certain cultural repression. The Church and its 
party left the press alone because there was a parallel Catholic press, but they 
extended their control over radio and television. Film censorship took place and 
Andreotti felt justified in denouncing Vittorio De Sica's Umberto D. The DC, 
which kept the Ministry of the Interior for itself, also tried to monopolize the 
Ministry of Education to ensure that the Catholic religion was taught in state 
schools and that state money flowed to Catholic schools. ^° 

Groups that had government support joined in the repression. At Fiat, 
Vittorio Valletta got rid of PCI and CGIL militants, isolated them in special 



The Postwar Settlement: Catholic Hegemony!' 31 

workshops, and gave bonuses to workers who supported in-house or Cath- 
olic unions. His methods were mild when compared with Sicilian tactics. 
On May 1, 1947 the bandit Salvatore Giuliano fired into a crowd of demon- 
strators. The Sicilian landowners were using the bandits in the struggle to keep 
their land. Later Giuliano was killed by the Mafia with police connivance.'^' 
The Mafia had resumed its pre-Fascist role of protecting the landowners, while 
itself profiting from land reform. Initially separatist, it became Monarchist or 
Liberal and then — demonstrating its ability to adapt to new developments — it 
began the alliance with the DC that was sealed in the mid-1950s and lasted 
until the 1990s. 

Not all these acnons were equally grave, and opposidon groups bear their 
share of responsibility. The PCI did nothing to improve labor relations in Fiat. 
That, too, has been a feature of Italian history: opposition groups seek not a 
change of government but a different poUtical order. The PCI was a revolunon- 
ary party, or pretended it was. This compelled — or allowed — the DC-led 
governments to use force. But repression damaged their capacity for represen- 
tation and hence the legitimacy of the new republic. 

The DCs second weakness was that, while hyperactive, it lacked a project. 
The GauUists were historically identified with the state and the British Conser- 
vatives with their empire. Other Christian Democrat parties devised projects, 
which gave them direction and around which they rallied support. The Ger- 
mans created the social market based on a mixture of free enterprise and 
codetermination, while the Dutch and Belgian Chrisdan Democrats developed 
their Catholic sense of an organic society into an efficient corporatism. By 
contrast the DC did not use its excellent dirigistes like Pasquale Saraceno and 
its culture of interventionism to plan the Italian economy. The Vadcan had a 
clear project of which the DC was a part; the DC had none. 

Indeed the concept of the "besieged" state may be applied to the DC of 
the 1948-54 years. Despite its landslide triumph (which was in reality the 
Church's victory), it faced an exacting master in Pius XII, a grumbling rival in 
the northern industrialists, and an implacable opponent, albeit less mighty than 
it pretended, in the PCI. This led it to surround itself with a bureaucracy that 
defended the government from the country rather than allowing the govern- 
ment to shape the country. The public administradon, which would fuel 
opposidon to the regime in the late 1980s, played for the DC and its allies the 
role it had played for previous governments. 

It passed, unscathed, from the second to the third incarnation of the state. 
However it was not a Fascist bureaucracy for it had made the same tranquil 
transition in 1922. Mussolini had circumvented the state apparatus when it 
suited him, but he had left it largely intact. In 1943 Badoglio got rid of the few 



32 THE CRISIS OF THE ITALIAN STA TE 

Fascists whose loyalty was in doubt, but neither he, nor — more surprisingly — 
the left-wing ministers in the postwar governments, nor the DC undertook a 
reform, much less a purge, of the civil service. 

The bureaucracy of post-Unification Italy was drawn from Piedmont and 
Sardinia and was modeled on the French civil service. From 1900 on. South- 
erners flooded into it because they had few options in the private sector and 
because their juridical, formalistic culture gave them an advantage. The bureau- 
cracy was conservative and rigid and the fragmentation of Italian society 
produced a plethora of regulation, difficult to explain and slow to apply. The 
conservative mind-set of this civil service facilitated its transition to Fascism. 

It also appealed to Pietro Badoglio, whose government from 1 943 to 1 944 
was made up of military and civilian bureaucrats. For the same reason the 
Resistance purged the northern civil service, which had continued to obey the 
Salo Republic and the German occupiers. The Resistance appointed its own 
prefects, but the upper echelons of the career service fought back. They found 
support from the Liberal Party, and one of the reasons for Ferruccio Parri's fall 
was the issue of the political prefects. 

The Left either failed to understand the importance of the state apparatus 
or was too timid to challenge it, so the bureaucracy won out. At first it distrusted 
the upstart Christian Democrats, but since the middle and lower echelons of 
the civil service were drawn from the lower middle class that was rallying to the 
DC, agreements were soon reached. "We'll be better off with the priests," is 
how Carlo Levi sums up the reaction in the Roman offices. So it proved. Before 
the 1948 elections the DC granted salary increases to most levels of the 
bureaucracy and after the election the civil service embraced the new masters 
of the state.^^ 

Forty-five years later the fruits of this symbiotic relationship were apparent 
in the Clean Hands investigation, when many groups, including the taxation 
police, were accused of accepting bribes. In the late 1980s, reform of the civil 
service had become a demand in the growing protest against the regime while 
the habit of buying votes through promised salary increases in the public sector 
had contributed both to the public deficit and to spiraling wage costs in the 
private sector. 

Democracy and efficiency have become lesser priorities than self-preser- 
vation and preservation of the political order. Thus "citizens" confront a remote 
bureaucracy protected by its intricate regulations. Despite outstanding excep- 
tions, such as the elite that had run IRI and the nationalized banks under 
Mussolini and that served the Republic equally well, the postwar civil service 
has been ill-equipped to manage a modern economy and, unfortunately, it has 
played its defensive role all too well. 



The Postwar Settlement: Catholic Hegemony? 33 

The DCs need for identity was apparent in the years 1948-54 and two 
major attempts were made to provide one. The first was initiated by De Gasperi 
and the second by Giuseppe Dossetti. De Gasperi had read the liberal French 
Catholic thinkers like Montalambert and his Austrian experience had allowed 
him to study a Catholic state that was not dominated by the Vatican. From his 
years in the PPI he drew contrasting conclusions, one of which was that Luigi 
Sturzo had been correct in separating Papacy and party. 

De Gasperi sought to emulate him in a different way: by seeking alliances 
with non-Catholic parties, some of them on his left. His aim was to allow the 
DC to mediate between Church and society, which would create the space for 
an autonomous Italian state that was Catholic, but not solely Catholic. The 
precise character of this autonomy and whether De Gasperi's concept of it varied 
from period to period are subjects of controversy.'*^ At the very least De Gasperi 
understood the need for the government to avoid being driven to the right and 
to make its own decisions. 

The development of the anti-Fascist movement in the last year of the war 
suited him well, because it created an alternative pole to the Vatican and 
widened his room for maneuver. It was an obstacle to the Vatican's recurrent 
temptation, exhibited as late as the Rome local elections of 1952, to push the 
DC into forming alliances with the Far Right. In the 1946 referendum De 
Gasperi resisted Papal pressure to call on DC supporters to vote for the retention 
of the monarchy. 

By late 1946 De Gasperi could see that both economic and foreign policy 
considerations were rendering impossible his coalitions with the Left. As a 
Catholic and a conservative he had no reason to seek permanent cohabitation 
with the PCI, although he was less crudely anti-Communist than someone like 
Luigi Gedda. De Gasperi continued to consider the PCI a legitimate part of the 
Republic, although the Cold War had removed its legitimacy as a party of 
government. Fiis service to the Republic was his intuition that it needed the 
PCI, if it were not to collapse into civil war. 

After his outright victoty in the 1948 elections De Gasperi continued to 
seek coalition partners. The Liberals and the Republicans provided a link with 
the lay business community of northern Italy; the Social Democrats offered a 
symbolic bond with the working class. By forging such ties De Gasperi hoped 
to strengthen the fragile sense of national unity. The lay parties would lighten 
the weight of Catholic rule. 

De Gasperi's openness should not be exaggerated. The second lesson he 
had learned from his PPI years was that the tie with the Vatican was essential: 
without it the PPI had been easy prey for Mussolini. Moreover he did not have 
the power to move far from Pius XII who controlled the DC electorate. De 



34 THE CRISIS OF THE ITALIAN STATE 

Gasperi had no interest in building up the party's organization; the DCs role 
was to back his government. But such a non-party could not support him against 
Pius and Catholic Action. Anyway De Gasperi was not above using the Vatican 
to quell the attacks made on him by the Dossettiani. His vision was different 
from Pius's, if only because he thought in terms of citizens and states. But he 
believed in Catholic unity and in negotiating with non-Catholics from a 
position of strength. 

This explains why he altered the election rules in 1953 so that the DC-led 
coalition might, with a reduced share of the vote, maintain its outright majority. 
Only then could the DC extend tolerance to coalition partners who would have 
no other options. Moreover aside from his one great intuition, De Gasperi did 
not articulate a vision of society. He did not rein in Scelba and he neither 
endorsed the free market nor defined a coherent pattern of public intervention. 
He left the DC neither capitalist nor an ti -capitalist but perhaps both. It remains 
true that De Gasperi saw the Italians not merely as the faithful but as the sum 
of various cultural groups. 

All these criticisms and more were made by Dossetti, who battled De 
Gasperi from 1946 until 1951, when he gave up politics. Where De Gasperi 
read Montalambert, the Dossettiani's bible was Jacques Maritain's 
L'Humanisme integral (1936), of which they offered their own interpretation. 
Dossetti believed — against the Augustinian view — that Christianity could 
transform the human condition. There should be no separation of Church and 
party, which meant no subordination of party to Church. There should be no 
concessions to lay values, although the Catholic party would work with all social 
groups. The DC should assert itself and take up the difficult but glorious task 
of building a truly Christian society. This would require a long political struggle 
during which the Catholic party would be apostolic but never sectarian, while 
lay values would of themselves become Christian. 

Since the ideal Christian society was based on the brotherhood of man 
Dossetti looked toward the PCI. He rejected historical materialism but he 
relished the future classless society. The Dossettiani attacked Luigi Einaudi's 
liberalism and affirmed that the market could not create full employment; state 
intervention was necessary. La Pira invoked Maynard Keynes and William 
Beveridge as well as the New Deal and he wrapped them in quotations from St. 
Matthew's gospel. The Keynes of the Cronache sociali {Social Chronicles) was 
not a reformer but a Franciscan. While it looked kindly on the Labor Party, 
Dossetti's magazine criticized the nationalization program (because it gave too 
much power to the centralized state) and preferred co-ops. The vision present 
in La Pira's widely read "L'attesa della povera gente" is a Utopian Catholic 
populism.'*'* 



The Postwar Settlement: Catholic Hegemony? 35 

As such it could not fill the void in DC culture. Although unwelcome to 
the Vatican, which distrusted its view of the Church-party relationship as well as 
its kindness to the PCI, it was as integrally Catholic as De Gasperi's more prosaic 
strategy of an outright majority. If Dossetti could not govern with the PCI, then 
he wanted to govern alone. Nor did he offer a solution to the problem of the state, 
which was supposed to dissolve into the reborn Christian community. 

However as long as they were active both De Gasperi and Dossetti 
demonstrated an awareness of the DCs predicament. After they left it became 
"pragmatic, empirical and directionless.'"*^ The judgment is harsh but it sums 
up the situation: the Catholic party had failed to re-found the state, but its 
power was assured. 



DILEMMAS OF A REVOLUTIONARY PARTY 

The opportunity to take control of the new republic was conceded to the DC by 
its ally-antagonist, the PCI: "In reality the Communists never challenged the DCs 
leadership. "46 The struggle between the two seemed equal but, even before 
the United States entered the fray in late 1946, it was not. Anti-Communist 
tirades about Cossacks watering their horses in Roman fountains masked the 
imbalance of a conflict between the Vatican, the industrialists, the state apparatus, 
and most of the middle class on one side, and the northern and central Italian 
working class on the other. The Soviet threat was, arguably, great, but the internal 
threat of Communism was not, although the fear of Communism was real. This 
made the PCI seem stronger than it was, while it increased the real strength of the 
DC. Moreover the PCI had no better solution than its rival to the problem of the 
Italian state. 

Togliatti's speech at Salerno reflects a moment when the interests of the 
international Communist movement, as defined by Stalin, overlapped with the 
interests of the Italian Communist Party, as defined by its secretary. Entry into 
the Badoglio government, the formation of as broad an alliance as possible and 
the subordination of Socialism to the national struggle against the Nazis suited 
the war goals of the USSR. They also constituted Togliatti's plan to re-establish 
in Italy a Communist Party that could work legally to block any return of 
Fascism, while gradually expanding its own influence. 

In April 1944, not anticipating the breakup of the anti-Nazi front, 
Togliatti envisaged the creation of a new mass party to replace the Third 
International model of a revolutionary elite. He foresaw a prolonged period in 
government during which the PCI would penetrate civil society and then, in 



36 THE CRISIS OF THE ITALIAN STATE 

indeterminate form, the establishment of hegemony. Here again, the failure of 
this strategy stemmed from domestic Italian considerations, although the 
East- West split worsened the defeat. 

First, the social bloc, which was supposed to gather around the project, 
was internally contradictory. Progressive democracy was to become the rally- 
ing-point for a coalition of the industrial workers, the peasantry, and broad 
segments of the middle class. The reactionary, monopolistic bourgeoisie would 
be isolated and the workers would spearhead the vast, national-popular alliance. 
The rather obvious drawbacks were that the lower middle classes were the group 
most imbued with Fascism and that the entrepreneurs wielded much of the 
economic power. 

Nor were the Gramscian underpinnings of the project any more con- 
vincing. The dominant view of Gramsci's prison writings is that they are an 
"open" work, subject to diverse interpretations. '' In the way he chose to 
present them, Togliatti, who understandably neglected the earlier, more radical 
articles of Ordine nuovo (New Order), emphasized the themes of a long march 
through the existing institutions, the weakness of an Italian capitalism dis- 
missed as parasitic and Malthusian, and hence the inevitability of hegemony. 
The results were positive in that they strengthened the new party's commit- 
ment to parliamentary democracy and to its own growth in membership, but 
negative in that they discouraged the PCI from acting rapidly to shape the 
emerging postwar structures, especially the economic structures. That task 
could be postponed until the social bloc was in place and the parliamentary 
alliances were working. Fiegemony was relegated to a remote future and yet it 
served to justify present prudence. "^^ 

This seems to contradict Gramsci's view that the precise nature of 
capitalist development was unpredictable and could be altered by the strategy 
of the working-class movement. Nor is it clear that, when he writes of penetrat- 
ing civil society, Gramsci means the existing organizations. However Togliatti's 
conservative reading justified his extreme caution during his period as Minister 
of Justice, when he left the Rocco code — the criminal law procedures intro- 
duced under Mussolini — intact; offered an amnesty that the magistrates were 
able to use to let serious Fascist crimes, including torture, go unpunished; and 
defended the corps of magistrates, although it had a conservative bias and had 
been subservient to the dictatorship. 

Such minimalism was paralleled in the economic sphere, where the PCI 
failed to press for Mauro Scoccimarro's currency reform, which would have 
combated inflation and allowed the taxation of war profits. Even the agricultural 
reform of the Communist Minister, Fausto Gullo, which did promote peasant 
ownership of land, was watered down with Togliatti's acquiescence. When 



The Postwar Settlement: Catholic Hegemony? 37 

inflation soared in 1946 the Communist ministers in the government made no 
serious attempt to fight it with selective credit controls. 

For the PCI's failure to use, much less change, the state, there are two 
main reasons. The first is the priority that Togliatti gave to working with the 
DC. This led him to weep no tears for the Parri government and to support De 
Gasperi's premiership. Parri was the incarnation of the Resistance, which was 
a source of PCI strength but that Togliatti distrusted. In part this reflected an 
aristocratic skepticism, typical of the Third International, about popular upris- 
ings. In part it was the Roman perspective that stressed political action rather 
than the guerrilla war waged in the North. But mostly it was fear that the new 
party would be guided down dangerous paths that led away from the goal of 
cooperation with the Catholics.'*'' 

Togliatti's upbringing was marked by Catholicism: his uncle had been 
a priest, his parents attended Sunday mass, and he had contacts with the 
Salesians whose faith had social ramifications. But this was not the reason 
for the tenacity with which he pursued the alliance with the DC. The 
ostensible reason was the DCs role as representative of the Catholic masses, 
who could be won over to left-wing positions. If one doubts Togliatti's 
inexhaustible variations on this theme, it is because one respects his realism. 
His true motive was the need to legitimize the PCI. His pessimism was 
revealed in a conversation with some young Communists who were waxing 
lyrical about the changes the PCI would make. It will be enough, Togliatti 
replied, if in a year's time we are not all in jail. 

The sense of illegitimacy would haunt the PCI and one cannot dismiss 
Togliatti's fear as groundless. One can, however, ask whether the PCI would 
not have done better to fight for structural changes — whether currency reform 
or renewal of the state apparatus — that would have enabled it to bargain better 
with the DC. Repeated acts of conciliation merely invited De Gasperi to use 
and then discard his ally. Moreover minimalist practice could not atone for 
maximalist doctrine: the identification with Stalin's USSR. Nor could a PCI, 
which had to support the daily demands of its working-class constituency for 
wage increases, restrictions on layoffs, and controls on the price of food, hope 
to appease the Liberals and private-sector industrialists, to whom De Gasperi 
had entrusted the economy. 

How can one explain Togliatti's persistence? Certainly he relied too 
much on his personal relationship with De Gasperi. When he exulted that the 
PCI's vote in favor of the Lateran Pacts would earn it 20 years in the 
government,^' he was underestimating the Vatican's toughness. The Church 
felt no gratitude for Communist support. The explanation that best suits 
Togliatti's realistic, pessimistic worldview is that he believed that the Catholic 



38 THE CRISIS OF THE ITALIAN STATE 

Church was uncontrollable. The PCI had no choice but to strike a deal with 
it, even if the deal was bad. 

If the Communists allowed the DC to monopolize and undermine the 
state, a second reason lay in their own culture. Their maximalist doctrine taught 
them that the Italian state was nothing more than the sum of the capitalist forces 
within it. Intervention to remedy the shortcomings of the economy was 
nonsense because the state "was no different from the machine it was supposedly 
repairing."^^ 

This view, which drew on Lenin's theory of imperialism, had survived 
Communist participation in the Popular Fronts. While it was certainly used by 
Togliatti to justify his minimalism, it was not a mere tactic. Rather it overlapped 
with the admiration for the USSR as a "different" society and with the rejection 
of Social Democratic experiments such as the Atlee government. As such it was 
an essential trait of PCI identity. It appealed to the militants of northern and 
central Italy who had fought in the Resistance for a new. Socialist society. 

Such revolutionary purity did not mesh perfecdy with Togliatti's choice 
of parliamentary gradualism. While awaiting the arrival of hegemony, the PCI 
had to do more than support any and every working-class demand. The 
temptation to organize coherent state intervention recurred in the so-called new 
course of 1946 as well as in the CGIL's employment plan. The new course 
offered wage restraint in return for government planning and a role for the 
works councils. The 1949 plan called for the nationalization of the electrical 
industry and public works to create full employment. Both schemes pre- 
supposed a reformist, Keynesian state, which cannot be considered a facade for 
private capital. Yet in both cases the PCI failed to find a language that could 
present them other than as concessions wrung from a liberal state or as signs of 
working-class hegemony. 

Such schemes might not have worked, but the attempt to make them 
work would have offered the model of a reformist state. It is probably illusory 
to imagine that alliances might have been forged with the Republicans or with 
DC planners such as Pasquale Saraceno and Ezio Vanoni. But at least Socialists 
such as Rodolfo Morandi would have been encouraged to develop their plan- 
ning projects. After 1947 the PCI was excluded from power because of its ties 
with the USSR, but it also engaged in a "self-exclusion."^'* It turned away from 
the business of government. 

This is the true form of duplicity practiced by Togliatti. It has been argued 
that he preached democracy but plotted revolution. Many Communist mili- 
tants did not turn in their arms at the Liberation. They viewed the new party's 
commitment to democracy as a tactic and believed that the machine gun was 
needed to create socialism. The party kept a paramilitary structure intact that 



The Postwar Settlement: Catholic Hegemony? 39 

went into action after the attempt to assassinate Togliatti on July 14, 1948. 
Amid the wave of strikes, DC offices were attacked, and at Abbadia San 
Salvatore, the telephone center that controlled the North-South lines was 
occupied. Milan, Turin, and Genoa appeared on the brink of insurrection. 

There was no plan by the leadership for an uprising, although for a day 
Luigi Longo and Pietro Secchia hesitated, allowed the disturbances to continue, 
and consulted the Soviets who offered them no help. As the strikes and 
occupations flagged, the PCI leadership called on the workers to cease all 
unlawful activity. Their duplicity lay in their hesitation, which provided the 
pretext for Scelba's repression. ^^ 

Togliatti, who on his way to the hospital had told his comrades not to 
lose their heads, never showed sympathy for illegal activity. When Giancarlo 
Pajetta occupied the Milan prefecture in November 1947 to protest the 
dismissal of the CLN-appointed prefect, Togliatti was furious. Ever afterward 
he mocked Pajetta for lusting after revolutions. When the Cominform criticized 
the PCI for allowing itself to be dismissed from the government, Togliatti was 
obliged to declare that the PCI was not limited to legal forms of retaliation. But 
this was no more than a gesture, which provided him with room for maneuver 
in his defense of the parliamentary road against critics like Secchia. 

Togliatti's real duplicity lay in pretending that the PCI was considering 
revolution when in fact it was not. Probably this was necessary to draw into the 
new party and into parliamentary democracy the northern Italian militants who 
believed in the machine gun. But the price of preaching revolution was the 
shunning of reformism. This condemned the PCI to immobility. Secchia 
became the voice of an alternative policy that advocated working-class pressure, 
in the form of strikes, demonstrations, and occupations, in order to gain 
concessions. This seemed to Togliatti dangerous but, while he was probably 
right, there is truth in Secchia's outburst that "if we listen to you we'll never do 
anything." 

The PCI's exclusion and self-exclusion from the state made it into an 
excellent party of local government in the regions it dominated. In Emilia- 
Romagna it set out to construct a model society with a broad class base and it 
succeeded in winning over segments of the middle class and some small 
entrepreneurs. The reformist and revolutionary strands were reconciled because 
the practice was Social Democratic — public investment in infrastructure and 
social services — while Communism acted as a Utopian goal and as a moral 

codc^*^ 

Emilia- Romagna could not be transferred to Italy because it was con- 
structed against Italy. The consequences of the PCI's (self-)exclusion for the 
party, for the state, and for the DC were profound. Having no representatives 



40 THE CRISIS OF THE ITALIAN STATE 

in the upper levels of the civil service or the nationalized industries, the PCI 
lacked knowledge, as the years of the historic compromise would reveal. Its 
culture was primarily one of opposition rather than of government and the 
organization it knew best was its own. The state suffered because there was no 
left-wing reformist party that would be obliged to use the state's instruments 
and consequently make them more efficient. Finally the DC was allowed to 
become the permanent party of government without having to demonstrate 
that it could represent the electorate or act efficiendy. 

Togliatti's achievement was to wean a radical working class away from 
illusory revolutions and toward the new state. His work complemented De 
Gasperi's distinction between the PCI as a party of government and the PCI as 
cofounder of the Republic. Togliatti set his party off on a road of heresy along 
which lay Berlinguer's appreciation of the value of the Republic's institutions. 

However another pillar of the postwar settlement was the PCI's recogni- 
tion of the DCs central role. By not challenging the DCs right to take the lead 
in governing, in return for a modest role in government before 1947, and for 
assuming the leadership of the opposition from 1947 to 1976, the PCI became 
an ally as well as an antagonist. 

There are affinities between Communist and Catholic culture. Parallels, 
as well as major differences, exist between the way the PCI ran Emilia-Romagna 
and the way the DC ran the Veneto. The Catho-Communist Franco Rodano's 
quest to unite both faiths by setting the Marxist concept of history within a 
Christian metaphysics is emblematic. In the 1940s the Communists' defects 
complemented the Catholics. Both ally-antagonists created mass parties that 
were supposed to instill democratic values and yet the Church and the PCI had 
Leninist structures. Jealous and all-embracing, each saw itself as the pole of 
identity that the state is supposed to represent. Tacitly the two agreed the Italian 
state was best left weak. 

For this reason the notion of Catholic hegemony is questionable. If the 
term hegemony is used to indicate not merely possession of power but the use 
of that power to guide the whole of society toward defined goals, then the 
Catholics were not hegemonic. A glance at Italy's role in the world reinforces 
this conclusion. 



Italy and the World: 
Helpful Americans, 

Rich Europeans, and 
Resourceful Italians 



Several recent events demonstrate hovi^ the intertwining of Italy with the 
outside world has changed. When the Ciampi government was formed in 
April 1993, it contained PDS ministers. They were from an ex-Communist 
rather than a Communist Party and they resigned after a day or so. Yet they 
evoked memories of 1947 and of the 40-year U.S. veto on PCI participation in 
the government. This time there were no anathemas from Washington. During 
the 1994 elections the anti-Communism was homegrown. 

In the debate about foreign policy it has been argued that Italy must find 
a new framework. The end of the Cold War has deprived her of both automatic 
U.S. protection and of occasional, safe revolts against it.' Life may well be harder 
without the heavy-handed but easily exploited Americans. In 1993 Foreign 
Minister Beniamino Andreatta, warned Italians that it was no longer enough 
to follow other countries; Italy must act too. 

In Europe the lira's departure from the EMS in September 1992 was a 
defeat for the Europeanist strategy, which was such an important part of the 



42 THE CRISIS OF THE ITALIAN STATE 

postwar settlement. Andreatta reacted by reaffirming Italy's belief in a federalist 
Europe, while the Amato and Ciampi governments pursued austerity policies 
designed to allow Italy to re-enter the EMS. However the Berlusconi govern- 
ment proclaimed its preference for a "Europe of the Fatherlands" EU, while its 
macroeconomic policy was weak. 

The postwar settlement involved opening the Italian economy to the 
world economy, which created hardships that have returned in the present 
recession. Unemployment has given rise to demonstrations, which have a special 
bitterness rooted in the reconstruction years when the working class paid a high 
price and waited a long time for a prosperity that now seems menaced. The 
threat to the Bagnoli and Taranto steel plants has reawakened the Southern 
question, which had never really gone away but which Italy had made strenuous 
attempts to resolve. In October 1993, when national unemployment stood at 
11.3 percent, it was 7.7 percent in the North and the Center, but 18.9 percent 
in the South, with Sicily, Calabria, and Campania with more than 20 percent 
unemployment.^ 

To adapt the economy to the international order, the state — once more 
playing catch-up — had struck a bargain with the northern industrialists. They 
received much aid but a large nationalized sector was created too. Now both 
sides are struggling: Fiat has cut workers and dividends, while Efim has gone 
bankrupt. 

However, in support of the thesis that the years 1992-94 reflect, in part, 
a modernization crisis, the Italian economy has begun to recover. Adaptation 
to world trends, albeit following national traditions, is present in the Fiat 
restructuring plan as well as in the privatization program. In spring 1994 the 
stock market soared and more shares were traded than at any time since the 
mid-1980s, while the denationalizations of Credito Italiano and Comit pro- 
ceeded smoothly. 

World time, in the shape of the Cold War and the internationalization of 
the economy, did create extra difficulties for the weak Italian state. However, while 
the state was not able to dominate outside events, it could seize the opportunities 
they offered — such as membership in the EC. So it is correct to say that "Italy has 
been shaped by international conditions to an extent unknown in any other 
Western democratic country, with the exception of Germany,"^ provided one 
acknowledges that Italians found ways to exploit those constraints. The PCI 
disappointed Stalin in the 1940s and irritated Brezhnev in the 1970s. The 
Americans did not want the DC to enjoy a monopoly on government, but the 
DC did. Similarly the Italian republic can not survive the end of the Cold War 
and the advent of the Internal Market without being re-founded, but both the 
spur and the obstacles to change come from within. 



Italy and the World 43 

This chapter is divided into four parts: the influence of the East- West split 
on domestic poHtics, Italy's place in the world, her role in the EC, and the 
impact on her economy and society of the process of internationalization. In 
these discussions the unity is thematic rather than chronological. 



HELPFUL AMERICANS 

The Truman administration entered the battle of the 1948 elections in the fall 
of 1946.'^ In November the Republicans gained control of the Senate and 
House. The Democrats needed a cause and Stalin thoughtfully provided one. 
I have argued that the 1948 result was the conclusion of a long struggle in which 
the bloc that gathered around the DC was far stronger than the Left's supporters. 
But in 1947 the outcome of the elections was in doubt, while East- West 
relations were deteriorating. 

This worked against the Left. Stalin's rejection of Marshall aid, his call for 
the Western Communist Parties to take a harder line, and above all the Prague 
coup of February 1948 undermined Togliatti's conciliatory strategy. By contrast 
the United States offered bread, money, a statement that the Western powers 
supported Italy's right to Trieste, and military assistance. The last of these affords 
insights into the Italian way of dealing with helpful foreigners. According to the 
peace treaty, Allied troops were to leave Italy by December 14, 1947. De Gasperi 
wanted a tough U.S. statement pledging military intervention if there were a 
Communist insurrection. Truman obliged and the United States also offered to 
send a military mission.^ However, DeGasperirefused this, just as in March 1948 
he refused a U.S. offer of massive reinforcements for the police and army. 

Two issues are involved. The first is that De Gasperi and the Italian 
political elite had no objection to outside interference in domestic affairs, but 
they sought to shape it. De Gasperi maneuvered to gain autonomy from the 
United States as he did from the Vatican. The second is that he believed the 
threat of force was more useful than the reality of force, which might produce 
a backlash in a nation still suffering from war and defeat. 

In the months before the election the United States combined covert 
funding of the DC with threats not to send Marshall aid if the Left won. Both 
actions were welcome to De Gasperi who continued, however, with Einaudi's 
deflationary policy despite American suggestions that increased government 
spending would be popular. 

The pattern that the international situation would impose on Italian 
politics was taking shape. The Soviets damaged the PCI by their behavior but 



44 THE CRISIS OF THE ITALIAN STATE 

they also provided it with money. The United States ensured that the PCI was 
kept out of the government and had as little power as possible. The Catholic 
Church, the DC and its satellites, as well as the majority of Italian voters 
welcomed this help. To speak of American imperialism is absurd. However the 
forms that U.S. pressure took were often irksome and conversely the United 
States was often exasperated by its inability to get its way. 

Usually American demands helped Italian leaders to do things that they 
would have done anyway, although perhaps in a different manner. When Clare 
Booth Luce prophesied there would be a civil war in 1 954,^ Italians flatly refused 
to comply. But when she reminded Fiat that the Pentagon was not awarding 
military contracts to companies in which the Confederazione generale italiana 
del lavoro (CGIL) organized the workforce, Valletta took action. In the 1955 
shop-stewards elections the Communist metalworkers union dropped from 63 
percent to 36 percent and in 1957 to a mere 21 percent.'' 

However, while Valletta may have been spurred by Luce's unsubtle 
reminders, he had been waging a long war against the PCI and the CGIL. In 
1949 he had ceased dealing with the works council and in 1951 he had fired 
the Communist director of social services. Moreover the PCI contributed to 
the difficulties of its union by not updating its analysis of the working conditions 
in a modern, mass industry. 

In general the United States set parameters: it could veto the PCI but it 
could not refashion the government. American interference damaged Italian 
political culture by blocking the alternation of parties in power — although at 
least until the 1 970s and perhaps later, domestic opposition to any PCI presence 
in the government was overwhelming — by weakening the state's prestige in the 
eyes of its citizens through ostentatious interference (although the citizens had 
scant regard for the state anyway) and by subordinating economic and social 
issues to anti-Communism. Covert funding encouraged corruption. Funding 
the MSI, as Ambassador Graham Martin did in 1972,^ encouraged a party that 
was not free of violence. 

An unanswered question is whether the CIA participated in the plots and 
acts of terrorism perpetrated by the Far Right. The aim of such actions, insofar 
as they were not undertaken autonomously by right-wing groups who often 
emerged from the MSI and who traced their legitimacy to the Salo Republic, 
was to threaten the PCI with a Fascist takeover and to remind the DC that it 
might not be indispensable. Evidence of CIA participation exists in the proven 
complicity of segments of the CIA- trained Italian secret services. 

The Solo Plan, orchestrated in 1964 when the Center- Left was in a 
delicate phase, was led by Giovanni de Lorenzo, an ex-head of SIFAR (Servizio 
informazioni forze armate), which had been financed and organized by the 



Italy and the World 45 

CIA.^ Vito Miceli, head of SID (Servizio informazioni difesa) and accused of 
participating in the subversive organization, the Rose of the Winds, was trained 
at NATO and had close ties to Graham Martin. There was SID involvement 
in the coverup of the 1969 Piazza Fontana bombings and perhaps in the 
bombings themselves, which raises the possibility of CIA knowledge or involve- 
ment. Certainly the CIA knew in 1 974 that Edgardo Sogno was plotting a coup 
and yet it did not share the information with the Italian government."^ One 
observer concludes that the student and worker movement "had to be beaten 
back. The Italian secret services, in all probability linked with the American, 
NATO secret services, thought the Greek solution might work: bombs, terror, 
a swing to the Right, if necessary some sort of coup."" 

Similarly there is circumstantial, although not as yet concrete, evidence 
that the Italian secret services manipulated the left-wing terrorism of the 1970s 
in order to damage the PCI.'"^ It is surprising that the Red Brigades were not 
broken up in 1 976 when they were weak and infiltrated. Here again the question 
of CIA involvement is raised and no definite answer can be given. 

Finally the CIA helped set up the Stay Behind or Gladio organization, 
which was first mooted in 1950 and took shape in 1956. Supposedly designed 
to provide resistance and intelligence in the event of a Soviet occupation, this 
illegal formation was probably used against the PCI. '^ If the CIA did participate 
in such actions, its role was to reinforce the U.S. veto. Here again there is no 
evidence to suggest that segments of the Italian secret services were dragged 
kicking and screaming into right-wing plotting. The United States probably 
played a formative role in providing money and training, especially during the 
late 1940s, but it never lacked recruits. However it conferred legitimacy on 
Italian participants. America guaranteed a political system that revolved around 
DC power. It did not invent or impose it, but it did help. 



ATLANTICISM AND NEO-ATLANTICISM 

The choice of Atlanticism was made with a certain reluctance. Later Italy 
flaunted her loyalty to NATO on many occasions: in the early 1980s she hosted 
the Cruise missiles at Comiso, with far fewer protesters than the installation of 
such missiles provoked in Germany, Holland, or even Britain. But Italy has her 
own worldview, which is often unshared and unloved by the United States. The 
1993 clash over Somalia was the most recent example. 

From September 8, 1943, Italy's prime foreign policy goal was to 
relegitimize the country. Like Konrad Adenauer, Carlo Sforza sought equal 



46 THE CRISIS OF THE ITALIAN STATE 

treatment. Italian objections to the peace treat)^ included the disappointment 
at being considered a conquered enemy, instead of an ally against the Nazis. 
The road to legitimacy lay in joining international organizations, which explains 
the instructions given by De Gasperi to Paolo-Emilio Taviani who led the 
Italian delegation to the meetings of the Schuman Plan. Taviani was to agree 
to anything, because what counted was to demonstrate Italian support for 
European integration. ''' 

This did not prevent Italy from negotiating skillfully in the Coal and Steel 
Pool. Like the other European countries, Italy sought, in the new international 
world of NATO and the EC, to reinforce the power of the Italian state. When 
Italy's interests were not served by international organizations, the government 
dragged its feet. Conversely it sometimes persisted with policies that were 
internationally unpopular. The Einaudi line of austerity, as confirmed by 
Giuseppe Pella, was criticized by the Marshall Plan administrators, and the 
balance of payments surpluses it created irritated the Europeans. A case of 
foot-dragging came in early 1948, when Italy was invited to join the Brussels 
Pact. Ernie Bevin felt he was being generous and he was outraged when Italy 
declined. De Gasperi feared supporting military alliances, which were widely 
disliked, and driving voters into the arms of the Left. Moreover he detected a 
nationalist mood that was disappointed with the peace treaty and that wanted 
Trieste and the colonies given back.'^ 

The next year Italy joined the Atlantic Alliance. The election was over 
and the government realized that by dragging its feet it was isolating itself. 
NATO offered security, and if the other members expected little from Italy, 
then so much the better. As an Italian and as a Christian Democrat De Gasperi 
knew that enlightened self-interest dictated joining. But although the change 
of policy was conducted with trumpet blasts of commitment to Western 
defense, the national concerns remained. 

The first was for peace. Its constituency ran from the PCI via the PSI to 
Gronchi and to the Dossettiani, who accepted entry into the Western alliance 
with great reluctance."' Where Sforza identified the Italian nation with the 
tradition of the Western Enlightenment, many Catholics identified it with the 
Church and with a Mediterranean culture that was uncapitalist and populist. 
Pope Pius XII himself was lukewarm about the alliance. Forty-two years later 
the Catholic-Communist front would re-emerge during the Gulf War of 1991 
when the PDS, at the Rimini Congress, where it was officially breaking with 
its Communist past, proclaimed its distaste for military action against Saddam 
Hussein and found common ground with Catholic protesters. 

By now the Cold War was over and the position of orthodox Atlanticists was 
weaker because the enemy was no longer the mighty USSR. However the distaste 



Italy and the World 47 

for the Gulf War had deep roots. The neo-Atlanticist tendency that emerged in 
the 1950s was inspired in part by a Third Worldism, which led it to question both 
the bipolar structure of the Cold War and European colonialism. Amintore 
Fanfani's attempt to begin a dialogue with Egypt after the Suez conflict, Enrico 
Mattel's dealings with the Algerian rebels, and Giorgio La Pira's later attempt to 
mediate in the Vietnam conflict are examples. Behind all of them is the belief that 
Italy, having no colonies, was able to deal fairly with developing countries. 

Students of continuity in foreign policy would see the neo-Atlanticist 
thesis, that Italy's culture and her geographical position on the Mediterranean 
offered her a sphere of influence in North Africa and the Middle East, as a 
revised form of Mussolini's dreams of empire. Certainly the idealistic vision of 
a fairer relationship with the Third World overlapped neatly with a reassertion 
of Italian nationalism against the dominant Western powers. Fanfani, who had 
supported the invasion of Abyssinia, was such a nationalist. 

The economic dimension of the policy was provided by Enrico Mattel. 
Offeis to Iran and Egypt of a better deal than the U.S. oil companies ofi^ered 
were designed to obtain a measure of independence in the domain of energy. 
Between 1948 and 1962 Mattel doubled Ente nazionale idrocarburi (ENI)'s 
share of the amount of petrol sold in Italy. His discovery and exploitation of 
the natural gas deposits in the Po Valley was one reason for the economic 
miracle. Meanwhile foreign companies were allowed to drill only in Sicily.''' 

Mattel's success in competing with the oil giants was limited; in 1962, 
before he was killed in a plane crash, he was in the process of compromising 
with them. The whole enterprise of neo-Atlanticism was dubious. Its protago- 
nists were not united among themselves: Amintore Fanfani and Giovanni 
Gronchi were rivals, while Mattel founded a separate faction of the DC, the 
Base. The most likely candidate to lead such a movement was the PCI, which 
was barred by its illegitimacy and formed no more than temporary alliances 
with Mattel. The goals of neo-Atlanticism and its relationship with orthodox 
Atlanticism were unclear. 

Yet most European countries — Britain as well as Gaullist France — have 
sought, each in its own way, a degree of independence from the United States. 
That Italy, too, should have a national vision of world affairs and should wish 
to pursue it is yet another proof that Italians sought some control over their 
destiny. Nor did this attempt cease with Mattel's death and Fanfani's defeats. 
Fiat bestrode the East- West divide when it founded its plant at Togliattigrad, 
and in the 1970s it incurred U.S. displeasure when it sold a block of its shares 
to Qadaffi. 

In the 1980s Italian ties to the PLO were closer than the United States 
would have wished, and Italy opposed the U.S. readiness to use force in the 



48 THE CRISIS OF THE ITALIAN STATE 

Middle East. A dramatic conflict flared up after the hijacking of the Achille 
Laura in October 1985, when the U.S. navy forced a plane carrying a group 
of Arab terrorists to land at Sigonella. The United States wanted to take the 
men into custody but the Craxi government asserted Italy's control over her 
national territory. It took charge of the group and then released them. 
Andreotti, who was Foreign Minister in the Craxi years, persistently opposed 
U.S. initiatives in the Middle East. He sought to avoid the use of force, to work 
through the UN, and to establish Italy as a mediator.'^ There is no evidence 
that he was without public support and, among the political parties, objections 
from the PRI were outweighed by sympathy from the PCI. 

Criticisms of the substance of this policy are legitimate but not over- 
whelmingly convincing. The Reagan administration was strong but incon- 
sistent in its stands on the Middle East. The most telling objection to Italy's 
softer line is that the political will to promote it was lacking. When the 
Persian Gulf came up for debate at the G7 meeting in June 1987, Craxi had 
been forced out and the caretaker Fanfani led the Italian delegation. Once 
more there were various strands in Italian policy. Craxi supported the 
Palestinian aspiration toward a home state, but he distinguished between 
moderate and extremist Arab countries and he was very anxious — for domes- 
tic and party reasons — to remain on good terms with the United States. 
Andreotti sought rather to unite the Arab world so that it could find its own 
solutions to the Palestinian question. This offered Italy a special role as the 
Arabs' principal interlocutor at the risk of worsening relations with the 
United States. 

In general the state behaved abroad rather better than it did at home, but 
with the same flaws. The DC-led coalitions excelled in mediation, but they 
could not lead. Nor could they pursue any heretical policy for long because of 
their internal divisions. This reduced much of Italian foreign policy to mere 
symbolism. 

The aim of liberating the Third World did not extend to liberating it from 
Italian corruption. Craxi took pride in increasing foreign aid, which went from 
0.24 percent in 1983 to 0.4 percent of GDP in 1986. However the Clean Hands 
operation has questioned the way aid was distributed. Officials in the coopera- 
tion program are under investigation, while money, allocated for projects in 
distant countries like Bangladesh, seems to have gone only as far as the pockets 
of Italian politicians and businessmen. '^ Even before he became Prime Minister, 
Craxi was accused of engaging in shady deals with the dictator, Siad Barre, and 
the Somalians remembered them when the Italian contingent of the UN force 
arrived in 1993. Of course, corruption in dealings with former colonies is not 
exactly unknown in France and Britain either. 



Italy and the World 49 

Another criticism is that Italian heresy would not have been possible, if 
the United States had not been present to protect orthodoxy. This view leads 
to the conclusion that, since the United States is now withdrawing, Italy will 
be left with no policy at all. But such pessimism presupposes that the process 
of re-founding the state will collapse. It is legitimate to argue that a stronger 
state may be able to define and pursue a national vision, which the old regime 
perceived but sacrificed — to American strength and to its own weakness. 

Ciampi and Andreatta made a start. Andreatta defined the new situation: 
"There are no more 'locomotives' or outside leaders. "^° He argued that Italy 
can only act through international organizations and he threw himself strongly 
behind the Februar)' 1994 NATO ultimatum in Bosnia. Ciampi has even 
spoken of the need to increase defense spending in order to improve Italy's 
deliberately neglected armed forces. In what seems a rebuke to neo-Atlanticism 
and to its roots in Catholic populism, Andreatta dismisses "any so-called special 
role" for Italy based on the notion that her culture is "closer to man." Yet it is 
hard to see how there can be a greater national effort in foreign affairs unless 
policy is grounded in national culture. Andreatta has defended the action of the 
Italian contingent in Somalia, emphasizing the knowledge of local conditions 
and negotiation against the American resort to force. He writes of the need for 
the UN "to give up an arbitrary and unilateral use of violence." 

The cultural forces that steer Italy toward a Mediterranean role are still 
present. Recently !l Manifesto suggested that the Mediterranean countries might 
form a group that would bridge the gulf between wealthy Europe and the poor, 
overpopulated Moslem nations.^' This is the kind of special role, which springs 
from left-wing populism and which Andreatta condemns. Yet the very realistic 
Ciampi has spoken of the central importance of the Mediterranean basin for 
Italy. "^^ The end of bipolarity has left openings for regional groups and, 
conversely, the situation in Algeria is so desperate as to make any serious 
Mediterranean initiative welcome. 

Andreatta stresses the need for Italy to be "reliable. "^^ Synthesizing the 
argument between Sforza and Dossetti, he claims that in the West there is a 
universalism that stems from the Enlightenment, of which Italy is a part via her 
membership in the European Community. Then there are the re-emerging 
nationalisms in Central and Eastern Europe and the resort to fundamentalism 
in North Africa or the Middle East. Italy can play a role by engaging in a dialogue 
with the second and third groups as long as she remembers that she belongs to 
the first. This is an outline of what the foreign policy of a revitalized Italian state 
might be. 

The Berlusconi government had too short a period in office to leave its 
mark on world affairs. The Prime Minister handled the G7 meeting at Naples 



50 THE CRISIS OF THE ITALIAN STATE 

well. During the Rwanda crisis Italy first offered to send troops to support the 
French contingent and then backed off, which is understandable but hardly a 
sign of reliability. The Berlusconi-Yeltsin meeting in October was overshad- 
owed by the domestic problems that beset both leaders. The Italian government 
pursued the goal of increasing Italy's influence in the UN Security Council. But 
this task was bequeathed to future governments, in particular to Susanna 
Agnelli, Dini's Foreign Minister. 



EUROPEAN UNITY: A NATIONAL STRATEGY 

Like the other defeated power, Germany, Italy needed the friendship of all her 
Western conquerors. De Gasperi took care to link Atlanticism with European unity 
and the habit has persisted. Italy dislikes conflicts between the United States and 
Western Europe: during the 1 99 1 defense debates she maintained that the Western 
European Union could be the arm of the EC and an integral part of NATO. 
Atlanticism bears the connotation of battles, whereas Europe is associated with 
prosperity. In the postwar years the common perception was that other European 
countries were richer than Italy and that association with them would make Italy 
rich. Even today a certain inferiority complex lingers. The reverse side of the 
Mediterranean vocation is what has been called the "Tonio Kroeger complex": 
small brown people cannot afford not to associate with tall, fair people.'^'' 

To the DC-led governments being European meant supporting federal- 
ism. Even after it became obvious that de Gaulle's vision of a Europe of the 
Fatherlands had won out in the EC, Italy proclaimed her willingness to 
surrender her national sovereignty to a European authority. One explanation is 
that the weak Italian state had less sovereignty to lose. Another is that the 
informal networks by which the various clans exercised power could flourish 
under a European government, whereas more formal national power systems 
could not. Italy's Europeanism is, according to one view, composed of "rhetor- 
ical fervor, indifference, craftiness and lots of quiet reservations."^^ I would add 
that it contains a healthy dose of national self-interest. 

In the postwar years Italy helped try to turn the OEEC (Organization of 
European Economic Cooperation) and the Council of Europe into federalist 
forces. De Gasperi's government presented a plan whereby the OEEC would 
become permanent, would lead to social and cultural collaboration, would set 
up a political committee to discuss foreign affairs, and would settle internal 
disputes through its own Court of Justice. Neither Britain nor France had any 
interest in such a project and it is hard to imagine that De Gasperi and Sforza 



Italy and the World 51 

did not know this. But they were pursuing the national strategy of rehabilitating 
post-Fascist Italy. 

Reality dawned with the ECSC (European Coal and Steel Community). 
It was a Franco-German scheme and Italy was not consulted. However the De 
Gasperi government emerged from the negotiations with several victories. 
There was to be international, free movement of labor, which might ease 
unemployment; the Sulcis coal mines in Sardinia received a special subsidy for 
modernization, which has allowed them to remain open — albeit barely — until 
today; a Community market in scrap would provide cheap metal for Italy's 
many steelworks that used electric furnaces. Most important, Italy was to have 
access to Algerian iron ore for her full-process plants and was allowed to 
continue tariffs on imported steel for up to five years.^^ 

These concessions provoke three comments. The first is that Italy was able 
to parlay her weakness into an advantage. The second is that the Algerian iron 
ore was a present from France, which had sought to keep Algeria out of the 
ECSC but made an exception for Italy. In her bid to counterbalance Germany, 
France would repeatedly seek ties with Italy. Finally the five-year transition 
period meshed with domestic economic policy because it gave the Italian 
government time to implement the Sinigaglia Plan for a full-process, modern 
steel industry in the public sector. 

The Italian state had demonstrated that its Europeanism was also a matter 
of hardheaded national bargaining. The next development in European unity 
revealed that when there was no advantage to Italy, Europeanism could be cast 
aside. After hesitating until June 1951, Italy was sympathetic to Dean Acheson's 
wish to re-arm Germany and to Rene Pleven's plan to do this via a European 
Defense Community (EDC). However, as the issue dragged on, old fears of 
military alliances resurfaced. De Gasperi, who did not wish to repeat what he 
perceived as his earlier errors in the sphere of security, namely his foot-dragging 
over the Brussels Pact, launched a campaign to present the Pleven Plan as a step 
toward European unity. He stressed Article 38, which set out the goal of a 
federation. 

However, added to the concern for peace stressed by the Left and within 
the coalition by the Social Democrats and segments of the DC, was Prime 
Minister Pella's attempt to get concessions on Trieste in return for ratification 
of the EDC. Italy would not say no to a proposal backed by the United States 
and framed in the sacred language of European unity. Instead the government 
postponed ratification until after the French vote, which fortunately for Italy 
was negative. 

De Gasperi, who had by now left power, believed this to be a defeat for 
Europeanism, but his party did not. Even De Gasperi had allowed the EDC to 



52 THE CRISIS OF THE ITALIAN ST A TE 

take a back seat to the 1953 elections and to the noisy confusion that surrounded 
his manipulation of the electoral rules. This interpretation of the ECSC and 
the EDC gives little credence to the myth of De Gasperi as a founder of Europe, 
but it reveals an Italian state that saw in European unity a means of legitimizing 
itself — provided this could be done without too many military risks — and of 
modernizing its economy. In general it found its neighbors, who were pursuing 
their own national strategies, helpful. When they were unhelpful, Italy was not 
strong enough to impose its view. 

These strands run together in Italy's role in the founding of the EC. To 
its diplomats, especially to Gaetano Martino, goes much credit for relaunching 
Europe after the failure of the EDC. Messina, Venice, and Rome are the cities 
where the community was conceived and born. The removal of tariffs on 
industrial goods followed years of high growth and increased trade with the 
other members: Between 1948 and 1953 Italy's imports from them went from 
23 percent to 48 percent of its total imports, and its exports from 46 percent 
to 57 percent. The economic results during the years that followed the Rome 
Treaty were even better: between 1958 and 1968 per capita annual income went 
from $805 to $1,358.-^ 

Conversely Italy fared badly with the Common Agricultural Policy 
(CAP). In part this reflected the structural problems of its agriculture, but 
it also stemmed from political weakness. Italy was unable to prevent France 
from giving priority in the CAP to cereals, of which France was a major and 
Italy a minor producer. The high guaranteed price of wheat brought little 
money to Italy, but it made it harder for her to persuade her farmers to switch 
to crops that they could produce more efficiently. In general the north 
European bias in the CAP worked against Italy and especially against the 
South. Fruit and vegetables, of which Italy was a major producer, derived 
less benefit than cereals and dairy products. Any Italian government would 
have had difficulties, but the complex, lengthy negotiations on the CAP took 
place during the years of the Center-Left, when the political system was 
growing more inward-looking and fragmented, and when systemic clientel- 
ism was entering a new phase. 

Although economic modernization was spurred rather than caused by 
entry to the EC, the popular association of Europe with wealth was strength- 
ened. This had two effects on the political elites: they would lose prestige if Italy 
could not remain abreast of EC developments — hence the trauma of September 
1 992 — but they could use the EC as a way of coaxing and bullying the electorate 
into accepting unpopular measures. Or at least they could try. 

The EMS negotiations of 1978-79 provide a good example. The Bank of 
Italy was skeptical of the country's ability to give up the weapon of devaluation, 



Italy and the World 53 

but Guido Carli, by now head of the employers organization, declared that Italy 
must join the EMS even though (or because) membership would entail wage 
moderation and less public money to bail out lame ducks. ^^ In this case the 
foreigners were not helpful. Italian negotiators were unable to obtain either a 
version of the EMS that would place pressure on strong currencies to prevent 
them from moving upward, or changes in the EC budget that would provide 
Italy with financial aid. The obvious ally, Britain, was not interested in forming 
a joint front. The political system was weaker than usual because the period of 
the historic compromise was drawing to a close, and many in the DC wanted 
to use entry to the EMS to get rid of the PCI. 

They were successful, but with the PCI went any immediate hope of 
combating inflation. The austerity measures of the Pandolfi Plan were forgot- 
ten, inflation soared, and the lira was devalued by 6 percent in March 1981. 
Yet Italy survived entry to the EMS thanks to her wider band of 6 percent and 
to intervention by two nongovernmental actors. Fiat took the initiative and in 
a harsh confrontation in autumn 1980 laid off 20,000 workers. Meanwhile, as 
already stated, the small enterprises switched their exports to the United States. 
These two actions not merely improved the Italian economy but gave the state 
time to implement a deflationary policy, which was symbolized by Bettino 
Craxi's stand against wage indexation in 1984-85. Italy Inc. pointed the way 
and the state followed. That segments of Italian society move "ahead" of the 
state is a theme in the present regime crisis. 

Another lesson of EMS entry was that the tall, fair-haired men were often 
no richer than Italy (as with Britain) and that they were not going to solve 
Italy's problems (Germany). Italy continued to press for greater European 
unity and at the 1985 Milan summit of the EC Council of Ministers the Craxi 
government was active in the process that led to the Single Europe Act. 
Similarly Italy backed the Delors report on monetary union and held the EC 
presidency in the second half of 1990, when preparations were made for what 
would become the Maastricht Treaty of December 1991. Some of the details 
of the changes that the Internal Market and Economic and Monetary Union 
(EMU) would demand of Italy will be discussed in chapters 7 and 8. The 
principles were, first, that the EC could be used by modernizers — such as the 
Partito republicano italiano (PRI), the Bank of Italy (despite its wariness over 
the EMS), and the Employers Association — to force the public to accept in 
the name of Europe an austerity that it would not accept in the name of Italy. 
The second principle was that the DC-led coalitions would not be able to 
oppose a modernization, which threatened their clientelistic base, because of 
the prestige they derived from "Europe." The events ofSeptember 1992 proved 
once again that the rich Europeans were not going to help Italy at the expense 



54 THE CRISIS OF THE ITALIAN STATE 

of their own interests. Germany would not lower its interest rates, while France 
would not agree to a general devaluation against the mark. This time modern- 
ization required the breakup of the postwar order. 

Andreatta restated Italy's European policy in traditional language. There 
must be a "Federal hard core at the heart of Europe"^^ that will be strong enough 
to open to up to Central Europe and other countries on the periphery. This is 
the old Italian concern for parity with France and Germany and the belief that 
federalism offers the best chance of achieving it. By contrast Berlusconi's 
movement broke new ground in stating that "a European Union can and must 
be realized without conflicting with the political and cultural institutions of its 
nations."^*' Was this a historic shift to a Gaullist view of Europe? There were 
contradictory signs. Forza Italia ran in the European elections on the slogan of 
"counting more" in Europe, but the presence of Alleanza nazionale (AN) 
ministers weakened the government. At the Corfu summit of the EC Council 
of Ministers Berlusconi put up some opposition to the Franco-German attempt 
to impose Jean-Luc Dehaene as head of the Commission. But here again the 
laxity in macroeconomic policy was important. Since Berlusconi did not reduce 
the debt, he in effect took a third path, neither federalist nor Gaullist but away 
from the EU. By contrast the Dini government has spoken of austerity and a 
return to the EMS. 



INTERNAL CONSEQUENCES 
OF THE INTERNATIONALIST OPTION 



If joining the movement toward European unity was also a way of strengthening 
the Italian nation state, then opening the economy to Europe and to the world 
changed the nation state. Both the decision to open and the way it was done 
created problems for the state, while also providing the means to alleviate them. 
I contend that internationalization brought a prosperity that is one of the 
greatest achievements of the postwar political order, even if the politicians did 
not so much create the economic miracle as help it along, allow it to happen, 
and mediate its effects. For internationalization also brought conflicts and 
hardship. 

Struggling with the Allied occupation and the new constitution, the 
fledgling state never established itself as a dominant economic decision maker. 
The first battle came in 1946 when the harvest was good and production rose. 
Inflation rose too, fueled by free exchange of the lira for certain exports, lack of 
controls on bank lending and on the stock exchange in order to create some 



Italy and the World 5 5 

sort of capital market, and a government deficit that was not covered by a 
long-term loan for fear of crowding out private investment. 

The Communist Minister of Finance, Mauro Scoccimarro, proposed to 
deal with this by a currency exchange along Belgian lines, which would have 
permitted taxation of war profits. The government would have taken control 
of the economy and could have deployed further measures such as selective 
credit and the long-term loan. The risk was that currency reform would damage 
private sector investment and confidence when exports were rising. Moreover 
the economy was modernizing: machinery, which in 1938 had represented 6 
percent of exports, would reach 20 percent by 1947. 

Economists have anguished over the decision not to adopt Scoccimarro's 
proposal,^' but I would like to make two observations. Firstly the political will 
to opt for intervention was not present: Prime Minister De Gasperi left the 
key economic decisions to Liberals even after Treasury Minister Epicarmo 
Corbino resigned in September 1946, while Togliatti avoided pressing for 
currency exchange lest it alienate the middle classes and endanger the PCI-DC 
alliance. Secondly once the state lost — or rather did not fight — this battle, 
control over economic reconstruction fell to the private sector and its political 
allies. By early 1947 inflation had reached 50 percent per annum and the only 
way to cope with it was Einaudi's line of austerity. Interest rates were raised, 
thus causing a sharp decline in bank lending. As a result the lira, which had 
gone from 600 to the dollar in May 1946 to 900 to the dollar in May 1947, 
was stabilized. ^^ 

It cannot seriously be argued that opting for Scoccimarro's plan would 
have meant opting against the internationalization of the economy. Interna- 
tionalization was both imposed on Italy by the United States and chosen by 
Italy as a reaction against an autarky, which was associated with poverty and 
war. However the example of France demonstrates that dirigisme is compatible 
with free trade. Nor did the refusal of currency exchange mean that the state 
was giving up its right to intervene. There would be all too much state 
intervention in the postwar economy. It did, however, mean that the state would 
not take control of the economy in what might be called the "GauUist" manner: 
it would not set targets and allocate credit. Nor would it, because of the 
expulsion of the Left from the government in 1947 and because of the class 
conflicts in the country, adopt another classic method, which has been called 
"Austrian"^^ and seems to suit Christian Democracy: nudging the social part- 
ners toward agreements. 

The DC did not possess the authority to do the first nor the breadth of 
support to do the second. Nor could it follow the "Erhard" method, in which 
the state sets the rules and then withdraws, allowing the market to function and 



56 THE CRISIS OF THE ITALIAN STATE 

intervening only in the sphere of welfare. By the 1970s the Italian state was 
intervening so much as to prevent the market from functioning. At no time in 
the postwar period did the state govern economic development and its social 
consequences. 

However for the first 20 years after Mussolini's departure the economy 
was run in an updated version of the traditional alliance between a hyperactive 
state and a suspicious but energetic private sector. This worked better than some 
critics would admit. 

Thus the attack on economic policy made in February 1949 by Paul 
Hoffmann, an ex-president of Studebaker who was the head of the European 
Cooperation Administration, was misplaced. Eager for quick increases in living 
standards as a way of combating Communism and inspired by Keynesian or 
New Deal ideas, Hoffmann criticized the Italian government for using Marshall 
aid to strengthen the lira rather than for job-creating public investment pro- 
grams. However there is a convincing argument that such schemes work only 
in a developed economy where excess capacity is lying idle, whereas in Italy 
capacity needed to be created. The same reasoning may be used against the 
CGIL's employment plan proposed in 1949.^"* 

By then there was a political will to intervene in the economy. It may be 
found specifically in the Dossettian wing of the DC — an early nationalization, 
the Nuovo Pignone factory in Florence, was undertaken at the request of the 
mayor, Giorgio La Pira — and more generally in the distrust of the market that 
runs through Catholic culture. This may be also be seen as the contemporary 
form of the old Italian view that the state should quite normally support the 
private sector. ^^ 

The coherence of this view lay in the notion that the state did what the 
private sector could not do. It was a continuation of pre-war intervention when 
Mussolini had stepped in to bail out the banking system. At the Liberation the 
three major banks — Comit, Credito italiano, and Banco di Roma — remained 
in public hands and a new merchant bank, Mediobanca, was created to provide 
long-term and venture capital for industry. Despite the aggressively liberal 
ideology of the postwar years, neither AGIP (Azienda generale italiana petroli) 
nor IRI was dismantled. AGIP was turned by Mattei into ENI, which was the 
clearest example of the state taking the lead in a vital sector. IRI received a new 
statute in 1948, while a fund to finance the engineering industry turned into 
EFIM (Ente partecipazioni e finanziamento industria manifatturiera) in the 
early 1960s. 

The private steel companies held that Italy should not develop a full- 
process steel industry. Most of them — except Falck — limited themselves to 
reprocessing scrap metal. However IRI went ahead with the Sinigaglia Plan, 



Italy and the World 57 

also inherited from the 1930s, and built a modern steel industry that used 
Algerian iron ore. Sinigaglia was part of a group of technocrats headed by 
Alberto Beneduce, who had presided over IRI during the 1930s. Donate 
Menichella, who became governor of the Bank of Italy in 1947, Saraceno, who 
founded SVIMEZ (Associazione per lo sviluppo dell'industria nel 
Mezzogiorno), and Raffaele Mattioli of Comit were also part of that group. It 
is tempting to see these men as Italian dirigistes. They had enjoyed much 
freedom under Fascism and in the late 1940s they led the batde to use state 
power in order to internationalize the economy. However, unlike their French 
counterparts, they had no insntutions like the Ecole nationale d'administration 
and they were not working within a cultural tradition that favored the civil 
service or cooperation between technocrats and politicians. They were influen- 
tial now because their masters were busy saving the world from Communism, 
but from the 1960s onward most of the public sector would fall prey to systemic 
clientelism. The Bank of Italy escaped, but Saraceno lived to see the willful 
sabotage of his plans to transform the South. 

The closest the Italian state came to drawing up a blueprint for 
economic development was Saraceno's outlines for a four-year plan, which 
he presented to the OEEC in 1948. Its title indicates that it could be no 
more than a summary and it played nothing like the role of the Monnet 
Plan. However, sketchy as they are, the outlines reveal that a series of choices 
were made in the postwar period, in harmony with the key decision to 
internationalize the economy. Saraceno called for productive investment to 
increase exports, while consumption and labor costs were held down. The 
strategy worked: In 1952 exports were 10 percent of Italian GDP; in 1980 
they were 26 percent. In 1951 Italy had 2.2 percent of world trade; in 1987 
she had 5 percent. Moreover the growth figures were spectacular: from 1948 
to 1963 the economy grew at an annual rate of 5.5 percent and industry at 
7 percent. Fixed investment grew by 10 percent per annum in the 1950s, 
rising to 26 percent in 1963. By now there was a consumer boom symbol- 
ized by the Fiat 600. 

This miracle was the Republic's triumph and it makes nonsense of the 
theme that nothing changes in Italy. It created an economic self-confidence on 
which Silvio Berlusconi would play in his 1994 campaign, when he promised 
a new economic miracle and was believed. Yet there was a price to be paid.^"^ 
The choice of exports was a choice in favor of northern Italy and against the 
South, which exported little. Although one may argue that living standards have 
risen steadily in the South too, the split in the country remains. Within the 
North this was a choice against the working class, since it gave priority to exports 
over employment and higher w^es. 



58 THE CRISIS OF THE ITALIAN STATE 

The opposite set of choices would have created greater ills, but these ills 
were real. Moreover they were far-reaching. A parliamentary report 
demonstrates how the Camorra grew by catering to an unemployed Naples 
underclass that found jobs in smuggling first tobacco and then arms or drugs. ^'' 
The exclusion of the northern working class was apparent in the unemployment 
statistics: there were two million jobless in 1950 and many more underem- 
ployed. The decision not to emphasize consumption meant that in 1950 the 
average Italian ate 24 percent less meat than before the war. Nor was Valletta's 
view of labor relations untypical. 

Here the price was exacted once unemployment declined in the 1960s. 
Worker militancy grew and the Hot Autumn of 1969 saw massive and bitter 
protest, which continued intermittently until 1980. This period, difficult for 
all European countries, was especially trying in Italy, where the unions were too 
strong to be defeated and too alienated — except during the years of the historic 
compromise — to cooperate. Growth remained higher than in other countries 
but so did inflation. It never went below 10 percent, while in 1974 and 1980, 
which were the years of the oil crises, prices rose by 20 percent. Increases in 
welfare fueled the deficit, which then fed on itself and created today's problem. 
Interest on the debt was 2.5 percent of GDP in 1973; by 1982 it was 8.4 percent. 

A further problem was that too few choices were made and that rapid, 
uncontrolled development brought social and cultural tensions. Between 1958 
and 1964 alone, a million newcomers took up residence in northern Italy.^^ 
Emigration weakened the fabric of southern society and created problems of 
housing and integration in northern cities. They are given epic form in Luchino 
Visconti's Rocco and his Brothers. Along with the optimism about the economy 
ran a renewed pessimism about Italian society's ability to organize itself This 
too finds cultural expression in Pasolini's later writing where modernization is 
depicted as a blind, inhuman force. On the level of political economy the state's 
role, while it did not degenerate until the 1960s, contained in embryo two kinds 
of weaknesses. 

The first is that the private sector is both aggressively anti-statist and 
dependent on the state. Valletta's policy, inherited from Giovanni Agnelli, was 
to deal with public power from a position of strength. His success in obtaining 
U.S. aid was only one example. Yet throughout the 1950s Fiat enjoyed a level 
of protection that was the envy of other industries: cars were protected by tariffs 
up to 45 percent of their value, whereas the average was 17 percent. ^^ It is not 
a coincidence that Fiat has been less than successftil in other developed 
countries. Two out of every three cars made in its Italian factories are sold in 
Italy. '^'^ To make this criticism is not, however to argue that Luigi Luzzatti was 
wrong, but that the state-private alliance should take more sophisticated forms. 



Italy and the World 59 

The second weakness lay in the assumption that the pubHc sector could 
turn its hand to anything. Not only did IRI gradually become a pond full of 
lame ducks — Fiat sold its steel plant Teksid to the state in 1982 just when the 
steel industry was being cut back all across Europe — but there were no logic or 
limits to the big holding companies. The absence of a charter left space for 
empire-building. Mattel, instructed to close AGIP, turned it into a vast, 
diversified company, which went from oil and gas to petrochemicals and along 
the way acquired a newspaper, // Giomo. Mattel was indepeijdent, whereas his 
successors became mere tools of the political parties. But the danger lay in the 
inability to define what the public sector was supposed to be. 

One of the state's defects became a virtue. Too intrusive to allow big 
companies to grow bigger, the state helped small companies by its neglect. Often 
this took the form of not making them pay taxes or observe labor laws.'^' But 
it also permitted local cultures to flourish. Where such cultures were weak, as 
in the South with its pattern of absentee landowners and constantly moving 
peasants, no industry could develop. Where, as in Emilia-Romagna, the Veneto, 
or parts of Lombardy, there were peasant owners, sharecropping, and extended 
families rooted in Socialism or Catholicism, a special brand of industrialization 
took place. '^^ 

In these areas the firm was modeled on the family, with the father as 
entrepreneur, the mother as bookkeeper, and children as workers. As the firm 
grew, it employed neighbors but it remained in the village. The Catholic- 
Communist value of solidarity encouraged cooperation with other local com- 
panies to create a production chain, rather than competition for market share. 
Such companies made traditional products like clothes or shoes, but from the 
1960s on they moved into medium technology areas like machine tools or 
electronics. They entered the tertiary sector, setting up firms to provide services 
to industry, and they employed larger numbers of women. 

Small industry was stimulated by the decentralization of production 
undertaken by big companies during the 1970s as a way to escape strong unions 
entrenched in old industrial areas. But this was not the main impulse: the little 
Emilian town of Carpi had exported hats at the turn of the century. Rather 
small companies were the fruit of the absent — because overworked — state and 
of strong family and local ties. 

They were a resource that helped Italy overcome the traumas of the 1 970s. 
Whereas the number of workers in factories with more than 500 employees 
went down by 13.5 percent, the number in factories with fewer than 100 
employees went up by 11.5 percent.'*^ Flexibilit)', the great virtue of such firms, 
was vital in such a troubled decade. Internationalization did not disturb them: 
Carpi's hats continued to travel light. 



60 THE CRISIS OF THE ITALIAN STATE 

CONCLUSION 

The Americans and the Europeans set the parameters within which the Italians 
had to work. Born into the postwar world and nurtured by the Cold War and 
by European unity, the Republic benefited from Marshall aid and the Common 
Market, even as it suffered from the Soviet threat and the need to catch up withz: 
France and Germany. However, the margins of space left to the Italians were 

- greater than they often acknowledge and within this space they maneuvered 

^better than they often acknowledge. 

This becomes obvious if one considers the issue of Americanization. In 
the 1950s Italy seemed to be growing American in its culture: Hollywood, 
consumer goods, and sexual freedom were supposedly everywhere. In fact as 
one looks back, much of what was considered American was modernity as lived 
in other European countries — there is nothing uniquely American about dish- 
washers, Even here Italy developed its own brand of modernity.'^'' Many symbols 
of Americanization are thoroughly local — the Vespa and the Fiat 600 — while 
other symbols — canned foods — never caught on. At a deeper level Italian habits 
survived amidst the consumer society. Italians have never learned to buy and 
sell property with American nonchalance and they have a thoroughly un-Amer- 
ican savings rate. 

This is not to deny that the limits on the freedom of the Italian state axe 
obvious in decisions ranging from entering NATO to joining the EMS. World 
affairs accentuated the distortions of national history. Catholic rule was more 
severe and the alienation of the northern working class deeper. Greater demands 
were made on the state and its inability to respond to some of them was more 
damaging. As we will see, the DCs attempt to establish itself as a government 
that could cope with the domestic repercussions of this difficult world took 
shape in the mid-1950s. 



Clientelism as the 
Art of Government 



Beginning in 1992 clientelism, the special kind of corruption that lay at the 
heart of the postwar regime, was exposed daily in the press and on TV. Of 
all the examples the one that aroused most passion was the practice of Francesco 
De Lorenzo, Minister of Health in the 1989-92 Andreotti governments. He 
had systematically taken bribes from drug companies that wished to have their 
medicines certified by the government and hence put on sale. He had also taken 
a 5 percent cut on contracts awarded to companies that built new facilities in 
hospitals intended for AIDS patients. 

Although the bribery involving health care treatment aroused anger in the 
general population, the distinguishing feature of De Lorenzo's behavior was its 
organization. In addition to Duilio Poggiolini, he had among his helpers a 
battery of university professors — one of whom committed suicide when his role 
was exposed — who performed the tests and approved the medicines for the 
marketplace. The firms involved knew what was expected of them and paid 
accordingly. As for the 5 percent cut, it may be seen as a kind of tax. The money 
went not only into the pockets of the minister and his helpers, but into the 
coffers of the Liberal Party. Without it De Lorenzo would probably not have 
been elected nor appointed Minister.' 

He had gained control of a sector. A more common arrangement was 
division by territory. Remo Gaspari, the DC chieftain in the Abruzzo, saw his 
capital, Chieti, fall to the MSI in the local elections of 1993. He too had been 



62 THE CRISIS OF THE ITALIAN STATE 

exposed: his method lay in using his position as a perennial minister to divert 
government money to his supporters. Their efforts at election time brought him 
victories, which enabled him to demand a ministry. His power in Rome 
depended on his local base and vice versa. 

Sector and territory overlapped in the case of Gianni Prandini, the 
Minister of Public Works in the Andreotti government. He was accused of 
taking bribes from construction companies, using a set rate of 2.5 percent 
of the value of the contract. Other ministers were alleged to have looked after 
their constituencies. For example, Nino Cristofori, Andreotti's emissary in 
Emilia-Romagna, ensured that Ferrara received its share of Prandini's con- 
tracts. 

These examples offer us a definition of clientelism. It is the attainment 
and retention of power through the private expropriation of public resources, 
and through the use of the state to expropriate private resources. As practiced 
from the 1950s onward, it was a system. Although individuals in the DC and 
its allies may have been free of it, clientelism was a normal way of conducting 
business and without it the postwar order could not function. It is different 
from ordinary corruption, which is a mere by-product of wielding power. 

Clientelism was not the only reason for the DCs 45-year rule. Catholi- 
cism was more important at the outset, while conservatism and interclassism 
remained significant. Clientelism worked against the DC becoming a valid 
conservative party, because such parties defend the free market whereas clientel- 
ism works apart from and against the free market system. But occupation of the 
state gave the DC significant control over the electorate, although it helped lead 
to a crisis in the 1970s and it triggered the Clean Hands investigation that 
terminated DC rule. I have divided clientelism into two categories that begin, 
roughly, at different moments. The more sophisticated form, which I call the 
"publicized" economy, is left for chapter 5. 

Clientelism's origins are said to lie in the South. It belongs to a society 
that has remained a Gemeinschafi, a community that is regulated by vertical 
relationships and by personal ties rather than by notions of citizenship and 
rights.^ An idealized example is found in The Leopard in which Don Ciccio 
votes for the old monarchy because the King of Naples has sent him gifts of 
money so that he can study music. A more cynical version of the same 
explanation is that "amoral familism'"* permits no social contacts other than 
those based on short-term advantage. The exchange vote, in which the elector 
barters his possession (his vote) for a pension or a job, serves as an example. 

However it is too comforting to tie clientelism to the South and to 
backwardness. The Clean Hands operation was centered in Italy's most modern 
city. It might be argued that clientelism in the North is less the diversion of 



Clientelism as the Art of Government 63 

government aid to selected groups than the imposition of a tax on the market. 
The auctioning of pubHc contracts replaces the exchange vote. This is not an 
insignificant distinction but it does not appear fundamental, since each case 
involves abusing the state to retain and expand power. 

Nor is it sufficient to note, as we have done, that clientelism has long been 
practiced in Italy. This is a description and not an explanation. One might come 
closer in linking clientelism with Catholicism. At its best Catholicism produces 
volunteer organizations such as Caritas, but they, while admirable, share with 
clientelism the emphasis on individual "people" rather than on citizenship, as 
well as a distrust of structures such as a public education system. 

This leads us back to the state and to the explanation that the unusually 
rapid pace of economic growth led the state to undertake an unusual degree of 
mediation.^ Italy's integration into the dynamic world economy placed special 
strains on the South, which needed help. Its need crossed with the DCs need 
for a power base after its failure to find either a philosophy or a specific set of 
policies. This would explain both why clientelism became widespread after the 
departures of De Gasperi and Dossetti, and why it grew and changed along with 
Italy, spreading, for example, through the public sector industries. 

The prime aim of clientelism is to win votes and so a politician has to 
barter with whoever can deliver them. In Sicily this meant the Mafia. But there 
is a closer bond because the politician, engaged in bending the law, is drawn to 
groups that stand outside the law that, relieved of the burden of pretense, are 
efficient. So the alliance between the DC and the Mafia is not an aberration 
but rather a logical, if extreme, extension of clientelism. It also presents two 
kinds of risks. It cannot be publicly, and especially not internationally, acknowl- 
edged by the politician, while the Mafia may be unwilling to tolerate the 
compromises that he needs. Recently the Mafia has become exasperated with 
the unreliability of the DC-led governments and it has turned its violence 
against them and their agents. 

I have already argued that, although the prime responsibility for corrup- 
tion in Italy rests with the political parties, civil society put up no great 
opposition. Or rather opposition emerged as society changed, under the influ- 
ence of international developments and of the modernization process itself It 
is worth considering the evolution of one social group — the magistrates, who 
brought down the system of which they were formerly a part — for the interest- 
ing insights this example offers. 

This chapter will deal with the political system of which clientelism 
was an integral part and with the mechanisms of clientelism itself It will 
continue with a discussion of the Mafia and conclude with the example of 
the magistrates. 



64 THE CRISIS OF THE ITALIAN STATE 

FANFANI'S IRONIC TRIUMPH 

The years between De Gasperi's departure and the Center-Left coalitions are 
often considered inconclusive and the 1953-58 parliament has been dismissed 
as static.*^ But behind parliament's immobility, the political order that would 
last until the 1990s took shape. The key figure was Amintore Fanfani, heir to 
both Dossetti and De Gasperi. 

In the 1 930s Fanfani had attended the Catholic University in Milan where 
he developed a brand of corporatism. Economics depended on political coop- 
eration, which in turn rested on Christian ethics. This was an activist view since 
it denied the existence of immutable economic laws. It was also a view that 
could overlap with Mussolini's economic doctrine and Fanfani supported 
Fascism, especially the Ethiopian War. However, as the regime stumbled toward 
collapse, he moved to the nascent Christian Democrat party and entered 
Dossetti's circle. This was logical because the two shared a belief in state 
intervention and in the mission of a Catholic parry. 

Fanfani, who did not inherit Dossetti's selflessness, became Minister of 
Labor in 1947 and campaigned for full employment. He had more success in 
1949 when, as Minister of Housing, he launched a building program that 
produced jobs, popular housing, and speculation. He later became Minister of 
Agriculture where he formed an alliance with landowners who were resisting 
reform. His broad support within the party enabled him to become secretary 
at the 1954 Naples Congress. 

From Dossetti Fanfani had learned the importance of the party and from 
De Gasperi he had inherited the need to distance it from the Vatican. He also 
wanted to gain independence from the northern industrial elite. Where De 
Gasperi had initially left them and their political spokesmen, the Liberals and 
the Republicans, to run the economy, Fanfani wanted the DC to run it. He 
agreed with Scelba's 1948 comment that Italians would have to get used to 
seeing Catholics running businesses and banks. The DC was to be endowed 
with a project that would be Catholic corporatism, with a solid organization — 
Fanfani increased the number of party officials from 37,000 to 200,000 — and 
with funding of its own. There was a dash of de Gaulle in the Fanfani who took 
a pro-Arab stand in the aftermath of the Suez expedition. Neo-Atlanticism 
suited the DC, which was a strong party and believed in creating a strong Italy. 
Fanfani would not allow his party to slip into aimless pragmatism. 

In 1957 he set up the Ministry of the Public Sector and IRI and ENI, the 
big state holding companies, were regrouped within it. It was designed to give 
the DC greater control over the nationalized industries, and retrospectively it 
may be seen as foreshadowing the end of the period when the public sector was 



Clientelism as the Art of Government 65 

run efficiently. At the time there were clashes with the Employers Association, 
which feared the rise of what has been called the "state bourgeoisie." Signifi- 
cantly the first Minister, Giorgio Bo, had been Enrico Mattel's henchman. In 
1958 he created Intersind, a bargaining unit for public sector workers and 
management outside the auspices of the Employers Association. In 1957 ENI 
received the exclusive right to drill for oil and gas in all national territory except 
Sicily. Fanfani's aim was a larger, more democratic but still well-run public 
sector; his followers saw an opportunity for patronage. 

They also perceived Fanfani merely as a leader who was seeking to 
discipline them. After he increased the party's share of the vote in the 1958 
elections from 40 percent to 42.4 percent, he combined the offices of Party 
Secretary, Prime Minister, and Minister of Foreign Affairs, which proved 
unpopular with his followers. He was pushed out of his posts and his faction, 
Iniziativa Democratica, split. The larger group, which opposed him, took the 
name Dorotei. 

The issues around which this battle was fought were revealingly confused. 
Fanfani was associated with the projected opening to the Socialists, while his 
opponents were to the Right of him. Yet they elected as parry secretary Aldo 
Moro, who would lead the opening to the Left. Clearly policy mattered little. 
Fanfani's bid to instill into the DC some sense of the state had failed and "the 
moral basis of party discipline and unity had almost collapsed. "'' There is a link 
between Pius XII's death in October 1958 and Fanfani's ousting. The new 
Pope, John XXIII, would leave the DC somewhat freer and it had no wish to 
sacrifice that liberty to a strong leader. 

Moro, who would remain one of the two or three most important DC 
figures until his death, had a very different political vision. He did not wish to 
lead Italy anywhere. He perceived his role as mediating first among the various 
factions within the party, next among the party's allies, and then between the 
party and the country. He was a master of intricate compromises couched in 
language that was impenetrable to all except those with whom he was bargain- 
ing. His most memorable phrase was about converging parallel lines. Imbued 
with Augustinian pessimism, Moro believed the DC could remain dominant 
only by embracing the PSI and the PCI and slowly stifling them. 

The increasing importance of the factions is a parallel development to 
Moro's rise.^ They can be set on a left to right line with Forze Nuove and Base 
on the left, the Andreottiani on the right, and the Dorotei in the middle. But 
such categories mean litde, except that the Dorotei, which prevented the party 
from drifting too far left or right, constituted the compromise within the 
compromises. Political ideas are no guide to the factions. Andreotti became 
Prime Minister in the years of National Solidarity because, as a right-winger, 



66 THE CRISIS OF THE ITALIAN STATE 

he was supposed to counterbalance the Communists. Forze Nuove might be on 
the Left but its leader Carlo Donat Cattin loathed the PCI. People moved from 
faction to faction: Salvo Lima began as a Fanfaniano and ended as an An- 
dreottiano, while Remo Gaspari was a Doroteo who left to join Paolo-Emilio 
Taviani when Taviani formed his own faction. The aim of most leaders was to 
create factions of their own: Moro ceased being a Doroteo to form the Morotei. 

The best method of analyzing the factions is to perceive them as maxi- 
mizing DC power, while simultaneously fragmenting it. The Andreottiani 
attracted voters from the MSI — conversely in the Rome municipal elections of 
1993 they delivered many votes to Fini. Forze Nuove drew on the Con- 
federazione italiana sindacati lavoratori (CISL). The factions had a local base — 
the Andreottiani in Rome, Forze Nuove in Turin — from which they spread out 
across the country; the Andreottiani, for example, grew strong in Sicily because 
of Lima. The factions conquered power centers that were outside but close to 
the parry — the Base was funded by Mattel's ENI, while the Dorotei were allied 
with the small farmers association, the Coldiretti. In this way the factions were 
spearheads of the DCs penetration of society. 

But as the DC infiltrated the farmers or the bureaucracy it neither steered 
them in any particular direction nor united them under a firm government. 
Rather it reinforced the historical and cultural fragmentation that was already 
present. The factions acted — as the Dorotei did with Fanfani — to prevent the 
emergence of dominant leaders or adventurous policies. Two examples would 
be President Giovanni Gronchi's unsuccessful attempt, in the years after his 
1955 election, to increase the powers of his office, and Fernando Tambroni's 
abortive bid in 1 960 to change the rules of the parliamentary game by governing 
with the avowed support of the MSI. 

The political system that revolved around the faction-ridden DC was 
characterized by its capacity for maintaining and increasing its power at the 
expense of the state and of civil society. Proportional representation encouraged 
a plethora of small parties that were divided by ideologies both old — the anti- 
clericalism of the Liberals and the Republicans, and new — the pro-Americanism 
of the Social Democrats. Seeking to differentiate themselves one from the other, 
they entered and abandoned coalitions, thus weakening the government. 

This strengthened the parties, which were freed from the responsibility 
of ruling. Since new coalitions were formed by agreement among party secre- 
taries, the voters' power was also reduced. While it seemed fragile and chaotic 
the party system was virtually immune to attack. It was protected against 
internal antagonists by its fragmentation and it could accommodate anti-system 
parties such as the Radicals. It is no coincidence that in 1993 Marco Pannella 
helped to mobilize parliamentarians against the Clean Hands investigation. 



Clientelism as the Art of Government 67 

Recently it has been argued that the PCI was an integral part of this 
system, ruhng jointly with the DC."^ Although I have maintained that there 
were deep cultural bonds between the two groups, it seems an exaggeration to 
speak of joint rule. One must distinguish periods: until the 1960s the PCI was 
rarely consulted and it did its best to block such initiatives as entry to the EC. 
It was consulted about and approved the creation of the regional governments 
in 1970, but the failure of the historic compromise showed the limits of PCI 
power. In 1984-85 it tried and failed to protect wage indexation. The PCI was 
the DCs ally as well as antagonist because it protected the party system from 
external antagonists. The Communists dominated the opposition but, since 
they were considered illegitimate by the U.S. government as well as by a majority 
of Italians, they provided the DC with permanent power. 

On the Far Right the neo-Fascists played a stabilizing role, which 
Tambroni interrupted when he tried to legitimize them. Usually they protected 
the DC against the emergence of a conservative party that would have provided 
competition. The MSI acted as a safety valve: it was an annex in which the DC 
could lodge its right-wing voters, knowing that they would return. In 1972 the 
MSI won 8.7 percent as a protest against economic disturbances and the 
student-worker movement. But as the PCI vote grew, the MSI's voters went 
back to the DC and in 1976 support for the neo-Fascists slumped to 5.5 percent. 

The final actor in the system was the Italian secret services, operating with 
or without the CIA. Their role consisted not merely in taking action against 
the PCI, but in lending a hand to right-wing violence, promoting it, protecting 
its perpetrators, and laying false trails. Such acts of terrorism, along with the 
threatened coups, were designed to unsettle the Left. The Solo Plan drove the 
PSI to weaken the conditions it had imposed on its entry into the Center-Left 
governments. The bomb at Piazza Fontana in December 1969 came as a 
counterblast to the powerful worker demonstrations of the Hot Autiunn. Fear 
of a right-wing coup was one reason for Enrico Berlinguer's caution as the PCI's 
strength rose in the mid-1970s. The secret services' activities also served to warn 
the DC that it was not indispensable. Inevitably the factions used the services 
in their clan warfare: Andreotti's long periods as Defense Minister are thought 
to have given him useful contacts. Knowing the secrets of clientelism, the secret 
services could hardly resist participating. 

The mystery surrounding such questions, and the string of massacres that 
have never been fully explained, also protected the system. They made, and 
continue to make, rational analysis more difficult, while providing the material 
for self-interested accusations, blackmail, and tales of intrigue masterminded 
by omniscient, occult forces — the CIA, the Free Masons, the Soviets, it barely 
matters." But the effect was conservative: to maintain the existing order. The 



68 THE CRISIS OF THE ITALIAN STATE 

repeated government crises gave foreigners the impression that the system was 
unstable. In reality it was at least as stable as the French Third Republic. 

This regime was in no sense wholly bad. Its most spirited defender notes 
that Italians, while always ready to castigate their politicians, also showered them 
with attention.''^ Another defense might be that this system — conservative, 
flexible, and seeking to draw people in — was needed at a time of rapid, economic 
change. The contrast between a centralized, hierarchical government in France 
and an Italian political order that responds to demands from below, is a third 
rationale. '-^ Finally in 1992-94 the Republic passed the supreme test of allowing 
itself to be drastically modified without abandoning democracy. However, by 
its lack of accountability, by its negative strength, and by offering no alternatives 
to itself, the political system produced a caste that perpetuated itself through 
clientelism. 

The irony of Fanfani's period as secretary is that his party did liberate itself 
from the Vatican and the northern industrialists — as well as from him. But it 
did so by exploiting instead of guiding the state. A second way to analyze the 
factions is to consider them as clans that fought for their share of public 
resources. The DCs fragmentation '"* sharpened the clientelistic competition. 
The factions and the DCs satellite parties conducted civil wars, even while they 
were united in their determination to maintain the system. In Italy, as in most 
European countries, the state expanded its role in the 1950s by taking on the 
responsibility for social welfare. So there was much for the clans to fight over. 



GETTING AND SPENDING WE INCREASE OUR POWERS 

A well-documented example of how a DC politician and his faction amassed 
power via clientelism is provided by Antonio Bisaglia and the Dorotei, who 
conquered the Veneto. ' ^ The DC owed its strength in the region to the Church, 
which had a popular appeal that it had lost in some parts of northern and central 
Italy. After the war the party in Rovigo was led by a former member of Sturzo's 
PPI, Umberto Merlin, but the young Bisaglia was one of a group that rebelled 
and dethroned Merlin in 1954. It was the local equivalent of Fanfani's success 
at the Naples Congress. Untouched by ideology or ideas, Bisaglia wanted to 
shift power away from local notables to the party organization. He and the older 
Mariano Rumor of Vicenza were members of Fanfani's faction, Democratic 
Initiative, but they deserted Fanfani in 1959 and became Dorotei. 

By now Bisaglia had established his own power base. The Coldiretti had 
gone from 220,000 members in 1944 to nearly 8 million in 1958. They ran 



Clientelism as the Art of Government 69 

most of the consortiums that provided farmers with cheaper oil and fertiUzer, 
stored their crops, and gave them loans. They also ran most of the mutual funds 
set up in 1954 to extend health insurance to self-employed farmers.'^ As such 
they were an important organization in the countryside and a farmer could 
suffer if he crossed them. They were a flanking organization for the DC and 
sponsored 85 of its members of parliament. Bisaglia succeeded in becoming 
President of the Rovigo Mutual Fund, a position from which the skillful 
direction of benefits brought votes. 

In 1958 Enrico Mattel had Bisaglia appointed to the board of an ENI 
company called Snam. Mattel is often considered the founder of government 
by clientelism. He was said to own some 60 members of parliament, most but 
not all of them Christian Democrats. The appointment of Bisaglia was an early 
example of the publicized economy. It extended DC control over the nation- 
alized industries and channeled some of their profits to the party. The private 
sector did not stand aloof from this process and in 1961, BisagHa, who was 
devoid of experience in the field, was named Rovigo agent of the Generali, Italy's 
largest insurance company. He brought customers to the company and con- 
versely his ability to offer insurance on favorable terms could be converted into 
political influence over businessmen. 

As his influence extended through the Veneto in the 1960s Bisaglia formed 
links with the Grassetto family, who were in construction, and the Grosolis, who 
were meat importers. It is reasonable to suppose that he was helpful with public 
contracts and food regulations.''' More important was his influence over the 
Development Consortiums, set up by the government, in the Veneto. Here 
clientelism followed two patterns: factories were allotted to villages with DC 
mayors, while the companies that received grants often turned out to have DC 
owners. Perhaps most important of all, the Dorotei installed their supporters as 
presidents and board members of the chain of local savings banks. 

Such local power brought enough votes to send Bisaglia into parliament in 
1963 and to make him an important member of his faction. When the Dorotei 
split in 1969 Bisaglia joined Flaminio Piccoli and Rumor in the Movement of 
Popular Initiative. The three men also collaborated to build one of the most useless 
motorways in Italy, which was to run from Trento, Piccoli's fief, via Vicenza to 
Rovigo. At the DCs 1973 Congress this was the largest faction and hence Rumor 
became Prime Minister. However fragmentation continued: Bisaglia and Piccoli 
were joined in a generational struggle to oust Rumor and were on opposite sides 
in the struggle to replace him as faction leader. 

By now Bisaglia was a frequent member of the government. In 1970 he 
became Under-Secretary to the Treasury and was placed in charge of a Deposits 
and Loans Fund that advanced money to local authorities. In March 1974 he 



70 THE CRISIS OF THE ITALIAN STATE 

became Minister of Agriculture, a post perennially held by the DC and used to 
keep relations with the Coldiretti running smoothly. At the end of the year he 
was moved to the Ministry of the Public Sector, where we shall rediscover him 
in our next chapter. 

Bisaglia's career illustrates the way that the DC held onto power, after De 
Gasperi's retirement, by channeling public resources to its supporters. It was a 
process that destroyed statesmen and citizens alike, while turning everyone into 
a politician. Each region where the DC held power had its chieftain who ran it 
like a city-state: Taviano ruled Liguria and xMoro Puglia. Political power 
extended not merely to the economy, but to the judiciary system and the press. 
Bisaglia "owned" the Veneto newspaper, // Gazzettino and kept an eye on // 
Resto del Carlino, published in nearby Emilia-Romagna. 

Counterpoint to the penetration of grassroots society was control of the 
national bureaucracy, which was packed with DC supporters and that had to 
remain weak and slow in order to permit and justify political intervention. 
During the 1950s the coalition parties colonized the social services.'^ Welfare 
agencies such as the Istituto nazionale della previdenza sociale (INPS) and the 
Istituto nazionale assicurazione malattia (INAM) mushroomed. Unlike welfare 
agencies in Britain, they served only certain categories of people — which 
explains why self-employed farmers had their own health insurance system — 
and the regulations governing the sums of money they paid out were intricate. 
This suited the politicians who were able to divert payments to the most grateful 
rather than the most needy. INPS was a source of uninterrupted Social 
Democratic patronage from 1949 to 1965, while INAM was run by the DC 
from the Liberation to the 1970s. Party organizers were able to offer disability 
pensions in return for votes. So the bureaucracy was not purely defensive and 
conversely its role in clientelism further alienated the public. 

Unsurprisingly Andreotti invented the most ingenious brand of clientel- 
ism.'^ During his many spells as Minister of Defense he reduced the funding 
for weapons and training but he increased military salaries. He thus created 
obedient, if ineffective, soldiers who marched from their barracks at election 
time to do battle with his opponents. 

By its very nature the clientelistic process slowly undermined itself. 
Because it created bad government it cost the DC and its satellites voter support. 
In turn this meant more clientelism to win back votes. When the international 
economy plunged downward in 1973, there were insufficient public resources 
for private exploitation and the DC plunged too. In the local elections of 1975 
it lost such bastions as Rome and Naples. It was, however, saved by its 
ally-antagonist, the PCI. As Communist support grew, the DC was able to play 
its other roles as the anti-Communist and Conservative party. However, it could 



Clientelism as the Art of Government 71 

not cease to be clientelistic and in the 1980s the quest for resources and 
supporters grew ever more desperate. To study the spinning and the unraveling 
of a clientelistic web we need only turn to the Gava family as an example. 



DON ANTONIO IS NOT PLEASED 

The South was the key region in the DCs bid to become an autonomous mass 
party. Between the late 1940s and the mid-1960s the percentage of its mem- 
bership that lived in the North declined from nearly 50 percent to 28 percent, 
whereas in the South the figures were 18 percent and 30 percent and in the 
Islands 7 percent and 17 percent. ■^'^ The main reasons were northern irritation 
with inefficient public services and the battery of government agencies that 
steered money to the South. The plans for state intervention drawn up by 
Saraceno, Morandi, and their helpers were distorted, and the Cassa, which was 
supposed to be used for special government intervention, became a discretionary 
fund for politicians. At first it provided infrastructure and the alliance between 
the DC and northern industrialists was evident in the way that the machines to 
build roads and the fertilizer for the pilot agriculture programs were made in 
the North. This pattern continued after the Cassa had expanded into setting 
up industrial plants. However the distribution of Cassa funds and the locating 
of public sector plants were fought over by the rival political clans in the South. 

Naples provides a well-studied example of government by clientelism.^' 
In the early 1950s the DC gave it as a fief to the Monarchist, Achille Lauro, 
who in return split his own party. While denouncing the Christian Democrats 
locally, he helped them nationally. As mayor Lauro surrounded himself with 
builders, to whom he gave public contracts, notaries and law^^ers, who fixed 
rateable values, and shopkeepers who were seeking licenses. It was a clique 
without an organization and it depended on its leader's ability to occupy the 
town hall. 

In 1957 Lauro developed delusions of grandeur and ran hard against the 
DC in the regional elections, raising the Monarchist vote to 9 percent in 
Sardinia. Suddenly the Minister of the Interior learned of corruption in the 
Naples town hall and suspended Lauro. This was the beginning of the end for 
him and his power passed to the DC proper, in the shape of Silvio Gava. 

More properly power was passed to the Gava family: to Silvio, who was 
a government minister in the mid-1950s, and his sons, the best known being 
Antonio, who was president of the provincial government from 1961 to 1969, 
and who went on to a national career in the 1980s. From his immediate 



11 THE CRISIS OF THE ITALIAN STATE 

family — a son-in-law held the Fiat franchise in Naples — Silvio Gava extended 
his network to friends who were members of the Consortium for Industrial 
Development and leaders in the Chamber of Commerce. Control of credit was 
obviously vital and in 1959 the Gava family gained control of the Istituto per 
lo sviluppo e I'industrializzazione del Meridione (Isveimer). Six years later the 
publicly owned Bank of Naples fell to them and they had already had much 
influence in the private Banca Popolare. 

The difference between Lauro and the Gavas is that, instead of being a 
clique, they were the dominant force in the Naples DC. Their control over the 
local federation gave them power in both the city and regional government, 
which increased, and was increased by, their economic power. Their power base 
depended on their ability to appropriate the public money that flowed to the 
South. They were able to do so because of their positions in the national DC 
and in the government, which they obtained because they controlled the local 
DC. Theirs was a more ruthless version of the Gaspari syndrome and their defeat 
of Lauro marks the transition from unorganized to systemic clientelism. 

One measure of their control was the number of preference votes they 
could accumulate. While proportional representation and the party list were 
designed to weaken the power that local notables had exerted in the pre-Fascist 
period, the presence of preference voting — expressing a preference for one or 
several names on the list — provided a measurement of the popularity of each 
of the party's leaders. Competition for preference votes sharpened the compe- 
tition among the clans, required the distribution of public resources, and 
increased the victors' control over future resources. Unsurprisingly, preference 
voting was a target of the movement for electoral reform and in the 1991 
referendum the number of preference votes was reduced to one. Equally 
unsurprisingly, Antonio Gava opposed the referendum and the word circulated 
in Naples that "Don Antonio is not pleased." The fairly high level of participa- 
tion — 53 percent — as well as the massive yes vote — 97 percent — in Naples 
marked a defeat for him. 

This was one milestone in the decline of Antonio Gavas power. He had 
survived feuds with Emilio Colombo, the DC leader in Basilicata, and with 
Ciriaco De Mita, the Avellino boss; these were nothing more than the usual 
clan wars. Gava seemed to have survived the more serious Ciro Cirillo affair, 
where he was accused of using the Camorra to obtain the release of his 
henchman who was kidnapped by the Red Brigades in 1981. That Gava was 
later to become a leader of the Dorotei (now rebaptized as the Grand Center), 
who imposed Arnaldo Forlani as party secretary in 1989, and that he was briefly 
Minister of the Interior, where he controlled the police force, is proof of the 
political system's ability to defend itself. 



Clientelism as the Art of Government 73 

Gava's power waned because of three overlapping factors: the loss of his 
electoral influence, the Clean Hands investigation, and the anti-Mafia struggle. 
In 1992 a scandal in the health services at one of his strongholds, Castellammare 
di Stabia, provoked 53 arrests for bribery and an investigation into his lieuten- 
ant, Francesco Patriarca. Elections followed and the DC vote dropped by 22 
percent. ■^^ The following year the Cirillo charge was pressed by Luciano 
Violante, the PDS president of the parliamentary anti-Mafia commission. 

Unlike the Mafia, the Camorra is an amorphous collection of bands 
whose roots lie in the unemployed Naples proletariat. From here the Camorra 
extends through the rest of society, penetrating banks and influencing magis- 
trates. A politician seeking to extend his clientelistic network will almost 
inevitably encounter the Camorristi and Cava had long-standing ties with 
them. 

The Naples' earthquake of 1980 unleashed a flood of government funds, 
and contracts for clearance or rebuilding were distributed with no proper 
controls. Some 30 percent of the $40 billion allotted went to Camorra-owned 
firms. '^ At the same time, two attempts were being made to organize the 
anarchical Camorra, one by Raffaele Cutolo and the other by Carmine Alfieri. 
When Ciro Cirillo, the President of the Reconstruction Committee, was 
kidnapped in April 1981, his mentor, Cava, who was probably worried about 
what Cirillo might reveal, turned to the stronger leader, Cutolo. 

In July Cirillo was released after $1 million had been paid to the Red 
Brigades. Cutolo's price had three parts: improved treatment in prison and the 
prospect of release; lighter police controls in Naples because the increased 
surveillance after the kidnapping was interfering with Camorra business; and 
reconstruction contracts for firms linked with his organization. All three 
requests were granted after negotiations that featured other leading Christian 
Democrats, such as Flaminio Piccoli. 

However President Sandro Pertini blocked the transfer of Cutolo to a 
more pleasant prison and instead shipped him off to Asinara in Sardinia. Cutolo 
made his disappointment known, but the DC switched sides and threw its 
weight behind Alfieri. His firms received the contracts and his men decimated 
Cutolo's band. The anti-Mafia commission concluded that, although the ties 
between politicians and Camorra were endemic, "the key figure, both for the 
posinons he has held in the government and in his party as well as for the actions 
with which he has been associated, is Antonio Cava.""'' One can see that Gava's 
decision to turn to Cutolo and to strike the bargain was the logical conclusion 
of his method of conducting polidcs. In the Naples mayoral election of 
November 1993 the DC could not find a presentable candidate and the winner 
was Antonio Bassolino of the PDS. 



74 THE CRISIS OF THE ITALIAN STATE 

THE MAFIA— A DANGEROUS CLIENT 

In March 1992, during the election campaign, Salvo Lima was killed by the 
Mafia. An ex-mayor of Palermo and the head of Andreotti's faction in Sicily, 
Lima was viewed as one of the chief intermediaries between the DC and the 
Mafia. From 1968 to 1979 he had been in the Rome parliament, elected with 
around 100,000 preference votes, and in 1979 he became a member of the 
European Parliament. He had been mentioned approximately 150 times in the 
reports of the anti-Mafia commission, although never formally charged. ^^ 

In 1982 the Mafia had executed the PCI regional secretary, Pio La Torre, 
because he was an opponent. No attempt could be made to present Lima's 
murder in the same way. A slightly more plausible explanation was that Lima's 
ties had been mostly with Stefano Bontade, whose family had been defeated 
in the Mafia wars of the early 1980s. However it is more likely that Lima was 
killed because the relationship between the DC and the Mafia, which he had 
personified, had broken down. His friend and fellow Andreottian from 
Catania, Nino Drago, withdrew from politics after seeing a henchman, Paolo 
Arena, murdered. 

The most likely reason for Lima's death was his — and by implication 
Andreotti's — failure to get the long prison sentences imposed on Mafia leaders 
in the mass trial of 1986 reduced. The Mafia wars of the 1960s had ended with 
the extremely lenient Catanzaro and Bari trials. The different outcome 20 years 
later poses questions of why Lima had failed and why the DC-Mafia relationship 
had broken down. 

The split turned into a war between state and Mafia, which is arguably 
unique in post-Liberation history, and hence another sign that the old regime 
was ending. In the early 1980s the Mafia had dispatched isolated representatives 
of the state who had threatened it — the best-known example is Carlo-Alberto 
Dalla Chiesa — but in the 1990s it conducted a war. Giovanni Falcone and Paolo 
Borsellino who had spearheaded the campaign against the Mafia were killed in 
1992 and bombs were placed in Rome, Florence, and Milan in the summer of 
1993. However this time the state fought back not merely by arresting the head 
of the Mafia, Tot6 Riina, but by delving into the DC-Mafia links and lifting 
Andreotti's parliamentary immunity. Where Dalla Chiesa had complained in 
1982 that the government had abandoned him, the Amato and Ciampi 
governments backed the pool of magistrates in Palermo. The Berlusconi 
government was more hesitant: it questioned the reliance on Mafiosi who turn 
state's evidence and was generally hostile to the magistrates. 

To discover what the DC-Mafia links were, we must glance back at Lima's 
pre- 1968 career and at the Sicilian version of Fanfani's bid to create an 



Clientelism as the Art of Government 75 

autonomous parry. Lima's adult life was spent in the DC. He was a member of 
its youth movement before he was elected to the Palermo city council and placed 
in charge of public works. Along with Giovanni Gioia and Vito Ciancimino, 
he represented the DC of the 1954 Naples Congress. The Palermo branch had 
been led by right-wing notables, but now the party machine ousted them. 
Money was descending from Rome and Lima used it to rebuild Palermo. 

Where patronage had been distributed by individual notables, Lima 
centralized it in his office. ^^ He had a familiar array of gifts: building contracts, 
zoning licenses, access to credit, influence in the capital. Before and after he 
became mayor in 1958 he awarded thousands of contracts and permits, often 
to individuals without capital or qualifications, who were front men for his 
friends. To conquer the city the Fanfaniani destroyed it: Many of its baroque 
palaces were replaced by skyscrapers and planning was nonexistent. 

Meanwhile the Mafia was undergoing its own evolution. The role it had 
played in aborting land reform to serve the interests of rich owners as well as its 
own, ended when the power of the owners waned. It was time to embrace the 
DC. Michele Navarra, who was the head of the Corleonesi in the 1950s, had 
stayed with the Liberals until the 1948 elections but had then deserted them, 
Giuseppe Genco Russo of Caltanisseta had preceded him into the DC. When 
a DC official, Pasquale Almerico, worried aloud about this trend, he was 
murdered. More important Christian Democrats, such as Bernardo Mattarella, 
had been encouraging it as early as 1944. Giovanni Gioia, a future government 
minister, told Almerico that "certain kinds of comprises could not be 
avoided."-^'' The Mafia saw that the new rulers of Sicily were the party of 
government, which took over the extensive powers of the special region that 
was instituted in 1947. Its right to hire civil servants without using the normal 
criteria allowed poUticians a freedom that criminals could exploit. 

The shift from countryside to city came easily to an organization that had 
historic roots in Palermo, where in the post-Unity years it had protected the 
owners of market gardens in the fertile Conca d'Oro. This had been a period 
of rapid change in the city, which lost its role as capital of Sicily but benefited 
from the expansion of agriculture. Such moments suit the Mafia and in 1950 
another was at hand. Moreover the Mafia was in one sense continuing its role 
as mediator. The new rulers needed popular consensus in the shape of votes and 
the Mafia could provide them. 

At polling time instructions were sent by the families on whose territory 
the constituency was located. Votes were normally to be cast for the DC, 
occasionally for other parties — ^Aristide Gunnella of the PRI was sent in the 
same year as Lima to the Rome parliament, where he remained until his 
embarrassed party got rid of him before the 1992 elections — but never for the 



76 THE CRISIS OF THE ITALIAN STATE 

PCI. Perhaps more important was the distribution of preference votes within 
the DC, as Lima's triumphant score demonstrates. In return, construction 
contracts and cheap credit were awarded to firms controlled by or allied with 
the Mafia. 

In Sicily, too, clans were formed. In Catania Drago, the Mafia chieftain, 
Nitto Santapaola, and the Costanzo family, which owned a construction com- 
pany, joined forces. "^^ Clans needed lawyers to draft contracts, friendly policemen 
who turned a blind eye, friendly magistrates to slow down such investigations as 
did occur, and influential officials in Rome who could transfer unfriendly 
magistrates. Businessmen forced to pay protection money often opted to join the 
clan. The Mafia-DC presence pervaded every nook and cranny of Sicilian life, as 
Leonardo Sciascia has depicted in novels like The Day of the Owl?'' 

However the Mafia was neither a diffuse influence nor a DC satellite. It 
remained what it had always been: an independent force specializing in the use 
of violence. It also changed in that it acquired new forms of economic power. 
Agriculture was still important: in the wholesale market of Palermo, for which 
licenses were granted by the city, all 42 stalls were under Mafia control in 1960. 
But the families acquired interests in construction, transport, tourism, and 
finance. They were helped by northern firms that moved south. The Genovese 
company, Elettronica Sicula, formed an alliance with don Paolino Bontade who 
provided reliable, non-Communist labor in the 1950s. This set a pattern for 
northern firms, which bought a welcome in the South by giving subcontracts 
to companies controlled by the Mafia or the 'ndrangheta. 

The mere presence of a northern firm was sufficient to attract the Mafia 
into an area where it had hitherto not operated. It arrived in Melfi along with 
the Fiat plant. ^"^ In the last decade the Mafia has invaded central and northern 
Italy, where it has penetrated the Adriatic tourist resorts as well as Milan and 
Turin. Its chieftains were keeping themselves busy during their periods of 
enforced residence in towns far from Sicily. 

The Mafia is both a national and an international institution. Its American 
colonies increased its power in Italy by allowing it to enter the drug trade. In 
the 1920s it had shipped small quantities of opium and heroin to the United 
States, hidden in crates of food exports. During the 1950s, drug trafficking 
made its first great leap forward and found the Mafia ready. Unexpected allies 
were Fidel Castro and the French state. Raw heroin from the East was being 
processed in laboratories run by the Marseilles gangsters and shipped to Cuba, 
from where it could enter the United States more discreetly. Fulgenicio Batista's 
defeat and the French police's victory left a vacuum. 

Special skills were needed to fill that vacuum. The Sicilians had the right 
American contacts: Gaetano Badalamenti had a brother in the Detroit mob, 



Clientelism as the Art of Government 77 

while the Bonanno family of New York had kept its ties with the men of honor 
in its home village of Castellammare del Golfo. Moreover the drug trade, which 
entails travel, unwritten transactions, and dealings with people of many nation- 
alities and cultures, creates the need for a core group that is dependable. The 
Sicilian Mafia answered the need because of its "ability to constitute a state: to 
set rules, to control and to punish."^' 

The drug trade did not take away the need for the alliance with the DC. 
The money had to be invested and magistrates had to be blandished or transferred. 
But its success altered the Mafia's dealings with the DC in three ways. First, it 
became more difficult for the politicians to maintain the alliance because public 
opinion grew more hostile to the Mafia, especially after the second great leap 
forward in trafficking during the 1970s and the spread of drug addiction in 
northern Italy as well as in other EC countries. Second, the enormous profits — in 
1965 a kilo of heroin cost $350 at its place of origin and had a street value of 
$2'i5,000 — caused rifts within the Mafia and were partly responsible for the war 
of the early 1 980s. Finally the profits tilted the balance of power within the alliance 
away from the DC. The Mafia was less tied to a ruling class than ever before. 
When Lima was mayor of Palermo and awarding contracts, the Mafia needed 
him more than he needed them. By 1992 the reverse was true. 

This is a case where clientelism undermined DC power. Discredited by its 
dangerous acquaintances, the party was successfully challenged in Palermo by the 
Rete. In 1993 Leoluca Orlando was elected mayor, while Claudio Fava, whose 
father was a crusading journalist whom the Mafia had executed in 1984, almost 
emulated him in Catania. One might argue that Lima created Orlando. In turn 
Mafia arrogance spurred the state to a counterattack, which includes the most 
serious attempt in the Republic's history to purge the politicians, magistrates, and 
policemen who collaborated with it. The outcome, however, is uncertain. 



MAGISTRATES: FRIENDS TURNED ENEMIES 

Although Antonio Di Pietro became the necessary hero in a tale where most of 
the characters are villainous politicians, the Italian legal system has not emerged 
unscathed from the recent upheaval. Ordinary corruption among magistrates 
has been uncovered: in Messina they took bribes in return for granting building 
permits. More serious have been the revelations of collusion with the Mafia and 
the Camorra. At Caltanissetta charges have been made that magistrates had 
informed Mafiosi that they were being investigated and had helped block the 
procedures. In Naples 1 1 magistrates have been accused of collusion with the 



78 THE CRISIS OF THE ITALIAN STA TE 

Camorra, and one of them appears to have demanded as payment a Camorra 
assault on his ex-wife's new lover. ^^ 

Magistrates do not stand outside politics. In Milan a split emerged over 
the issue of corruption within the PDS. An avowedly anti-Communist magis- 
trate, Tiziana Parenti, wanted to press charges against PDS officials over the 
opposition of her pro-PDS colleagues like Gerardo D'Ambrosio. The charges 
were not pressed and she left the pool. She ran as a Forza Italia candidate in the 
elections and made speeches in which she claimed that the judiciary system was 
being manipulated by the Left. Her charges were repeated by Silvio Berlusconi 
when the Milan magistrates were investigating Fininvest in the days before the 
election. ^^ After Berlusconi's victory open war broke out between the govern- 
ment and the Milan magistrates, who won a notable victory in forcing him to 
withdraw his July 13 decree, which would have released from prison the 
politicians implicated in the Clean Hands inquiry. Equally disturbing have been 
the cases where magistrates have acted as an integral part of the clientelistic 
system. In the Enimont affair Judge Diego Curto was arrested for illegally 
sequestering shares bought by Gardini's supporters. 

The question as to why Curto had been appointed to the sensitive position 
he held, led to a debate about the Consiglio superiore della magistratura 
(CSM).^'^ As the body governing the corps of magistrates, it is composed of 20 
members elected from their ranks and ten chosen by parliament, which means 
by the party secretaries, with the President as its chairman. Since the corps was 
divided into factions that formed and abandoned alliances with one another 
and with the politicians, the CSM could lay no claims to neutrality. Indeed 
Cesare Previti, the Fininvest lawyer who almiost became Minister of Justice in 
the new government but switched to Defense, has suggested that the CSM 
should be reshaped to reflect the election victory.^^ 

The origins of this unhappy state go back yet again to the late 1950s.^'^ 
They demonstrate yet again Italian society's tendency both to form clans and 
to seek out politicians. This was not new because in pre-Fascist Italy the 
judiciary system enjoyed only a limited autonomy from the government and 
was considered a specialized part of the public administration. Generally 
conservative, it adapted to Fascism, which did not seek to transform it. When 
he needed them, Mussolini set up special courts and for the rest he had no reason 
to be displeased with the magistrates. 

Unpurged at the Liberation, they gained greater independence because of 
the Republic's distrust of executive power. The CSM was set up belatedly in 
1959 and it liberated the magistrates from the Minister of Justice. Yet at 
precisely this juncture the magistrates turned to the politicians who were 
extending their power through civil society. 



Clientelism as the Art of Government 79 

The reason lay in the magistrates' lackof identity as a corps. Discontented 
with the way they were regulating their own affairs in the key areas of promotion 
and salaries, they split into factions. Most factions sought allies in the parties. 
If the original issue had been the younger magistrates' resentment against the 
forms of selection imposed by their senior colleagues, and if they gained a more 
rapid and automatic mechanism of promotion, they also opened the door to 
selection by political affiliation. 

Over the next two decades the intertwining of magistrates and politicians 
increased. The former were well represented in parliament, while the latter 
were allowed a role in legal decisions. This helps explain why political corrup- 
tion was rarely investigated. Their statute compelled magistrates to open 
inquiries, but not to pursue them. Fragmentation was increased because each 
city office enjoyed much freedom. However this left each office vulnerable to 
local pressure: in Rome the office was regarded as sensitive to Andreotti's 
opinions. Overzealous magistrates might find the CSM transferring them to 
distant spots or conversely an inquiry could be moved to a city where the 
magistrates were more pliant. In 1981 the investigation of Licio Gelli was 
transferred from Milan to Rome.^'' Government by clientelism went ahead 
unrestrained and representatives of organized crime often escaped surprisingly 
lightly. In 1988 the Supreme Court Judge, Corrado Carnevale, annulled the 
trials in which 1 00 members of the 'ndrangheta family, the Piromalli, had been 
convicted. ^^ The Mafiosi convicted in 1986 had high expectations of Car- 
nevale. 

Of the factions that the magistrates formed, Unita per la Costituzione 
looked to the Center-Right, Magistratura Independente was legally conservative 
and distrusted politicians, while Magistratura Democratica (MD) perceived the 
judiciary system as a force for social equality. This stance led MD to support 
the PCI, which had initially distrusted what it considered class-based justice, 
but which found itself on the same side as the magistrates during the terrorism 
of the 1970s. Although this alliance could potentially turn against the system, 
it represented a further intertwining. 

During the 1980s the magistrates did not appear restive. Wars were 
frequent but they were mostly struggles that pitted one group of politicians and 
magistrates against another. Even President Francesco Cossiga's broadsides 
against the CSM may be interpreted as an onslaught less on the magistrates, 
than on the political-judiciary power that the CSM had accumulated. But two 
signs of change were present. The first was that Berlinguer had instilled into 
the PCI more respect for the democratic institutions of the Italian state, which 
meant that the PCI-PDS supported MD as it grew more critical of the 
magistrates' involvement in clientelistic politics. The second was that the PSI, 



80 THE CRISIS OF THE ITALIAN STATE 

having less support among the magistrates and determined to expand the 
frontiers of clienteUsm, displayed hostility toward the corps. 

In 1981 Craxi attacked the magistrates who had jailed Roberto Calvi. He 
obtained Calvi's release, but the magistrates noted that Calvi had threatened to 
give details about money he had contributed to the PSI. In 1984, now Prime 
Minister, Craxi issued a decree setting aside a judge's decision that was unfa- 
vorable to his friend Berlusconi with the comment "these magistrates are 
making me furious."^'' Earlier Craxi, anticipating the Berlusconi of 1994, had 
declared that he was the victim of a conspiracy spearheaded by left-wing 
magistrates."^*^ In 1987 the PSI led the battle for a referendum that extended the 
civil responsibility of the magistrates for their rulings. Moreover, while Socialist 
Minister of Justice Claudio Martelli's batde with the CSM in 1991 over his 
desire to appoint Giovanni Falcone as head of the anti-Mafia squad was a 
complex struggle pitting Falcone against the CSM, his attacks on Agostino 
Cordova, who was investigating PSI corruption in Calabria, was a defense of 
the political system against an inquiring magistrate. 

So the Socialists undermined the cozy alliance between the political and 
judiciary systems. Once the weakness of the ruling politicians was demonstrated 
in the 1992 elections, the magistrates had every reason to jump ship. The result 
of the 1 987 referendum had demonstrated that as a group they were not popular 
so they sought new forms of legitimacy. Their onslaught on clientelism brought 
enormous public support. Nor was it a coincidence that the Clean Hands 
investigation began in Milan. It was the PSI's showcase city, but the rise of the 
Northern League had demonstrated the electorate's discontent, while the pool 
of magistrates included representatives of MD. 

Magistrates in other cities followed, as they realized that the 1992 
elections marked the end of a power system set up in the 1950s. In towns like 
Avellino the politicians were strong enough to stifle the rebellion, but Rome, 
after some hesitation, sided with Milan. 

Di Pietro "with his chubby Molisan peasant's face, a face straight out of 
the countryside and the past'"*' seemed a figure from another, purer Italy. He 
had worked with his hands and studied at night. He had been a policeman 
before qualifying as a magistrate, so he was the right kind of person to investigate 
political corruption. His language lacked the polish of others in the pool but it 
was easier for ordinary Italians to understand and they trusted him. However, 
without underestimating his personal contribution to an independent justice 
system, the truth is that the old regime was collapsing because of the contradic- 
tions of clientelism. A glance at the "publicized" economy reveals similar 
tensions. 



The Publicization 
of the Economy 



Silvio Berlusconi launched his election campaign with a speech on January 26, 
1 994, and a rally on February 6. His main theme was that Italy must rely "less 
on the state and more on private initiative."' Offering yet another variant on 
populism, Berlusconi invoked the individual, the family, the small company, and 
the nation. The distinctive trait of his populism was his appeal not to the "howling 
piazzas" but to "decent people who are sensible and competent." Such language 
is Thatcherite. She had called for blood, sweat, and tears, however, whereas 
Berlusconi radiated optimism. Unemployment could be reduced by tax cuts; a 
new economic miracle was at hand. This was a reassuring, calm brand of populism, 
which relied on the cool medium of television. Although he used the language of 
soccer and spoke of "taking the field," the owner of AC Milan inhabited a different 
planet from his team's rowdier fans. His calm was the mark of his superiority: 
there must be no doubt of the leader's ability to create jobs. 

The rejection of the state was categoric. The goal was to privatize not 
merely the economy but education and health care. Berlusconi called for a break 
with "an Italy that is so politicized, statist, corrupt and hyper- regulated." The 
appeal of this message, which came after a two-year saga of corruption where 
the main villains had been the politicians, was obvious. Yet there was a 
marvelous irony about the messenger. Berlusconi had epitomized the overlap 
between the public and private domains, which had been created by the DC 
and PSI occupation of the economy. 



82 THE CRISIS OF THE ITALIAN STATE 

His first fortune was made in property development around Milan. It is 
hard to imagine that an activity so dependent on decisions about zoning could 
be conducted successfully without political allies, or that the loans that 
Berlusconi obtained from banks were miraculously free of politics. Paolo 
Berlusconi, Silvio's brother, has been charged with paying bribes to obtain 
zoning exemptions in the Milan hinterland and to persuade the state-owned 
bank, Cariplo, to buy his buildings. 

More serious charges were made against Fininvest. Marcello deH'Utri, the 
head of one of its companies, Publitalia, was accused of creating a slush fund, 
undeclared to the taxation authorities and designed to provide money for bribes. 
Fininvest admitted bribing the taxation police.^ However our interest lies not in 
Fininvest's moral or legal status, but in using it as an example of that overlap 
between business and politics that developed out of DC and then PSI clientelism. 

Berlusconi flaunted his friendship with Craxi, who contributed mightily to 
the creation of Fininvest's television empire. In 1981 the Constitutional Court 
ruled that only the state networks could operate over all the national territory and 
three years later a magistrate invoked this law against Berlusconi. At once Prime 
Minister Craxi issued a decree that allowed his friend's networks to continue 
operating. A 1990 law, which permitted Berlusconi to keep his three networks, 
was passed during the last, or CAF (Craxi-Andreotti-Forlani), phase of the old 
regime, and Fininvest was duly grateful. Its present acting President declared that 
"our news will reflect the view that Craxi, Forlani and Andreotti represent 
freedom."^ Berlusconi's only concern was to improve his relations with the DC 
while not irritating Craxi: Andreotti exacted his price for the law. 

So Berlusconi incarnated what I am calling "the state bourgeoisie":^ 
business groups that either run public enterprises, or else are in the private sector 
but use and seek political power; or entrepreneurs, financiers, and fixers who 
attach themselves to parties that use political power for economic gain. 
Berlusconi though could convincingly take the anti-statist stance, because he 
had spent some 1 5 years building a commercial TV empire that competed with 
the state service. 

The ambiguity of the Berlusconi phenomenon lies here. Confronting 
debts of $2.2 billion, the owner of Fininvest had to enter politics because control 
of credit had been thoroughly politicized. One of the banks to which he owed 
money was the Banca nazionale del lavoro, which was until recently "owned" 
by the PSI. In the 1970s the bank was a fortress of the P2 of which Berlusconi 
was a member. His privileged position in television could have been undone by 
a left-wing government. In the past the state bourgeoisie worked with and 
behind the avowed politicians. The collapse of the CAF led Berlusconi to bid 
directly for control of the state. 



The Publicization of the Economy 83 

Yet many of his voters and his parHamentarians supported him because 
they wished to use neoUberalism to drive back the invasion of the state into the 
economy. Two roads lay open to Berlusconi after his March 28 victory: to 
become the chieftain of a super-clan that would occupy the state, or to rid Italy 
of the publicized economy. 

Our task is to examine how the economy was publicized. {Publicized \s a 
word I have chosen to denote the often indirect but always improper invasion 
of the economy by the state bourgeoisie. It is quite different from the nation- 
alization of strategic industries that is a direct and often legitimate takeover by 
the state.) I am not discussing the Italian economy as a whole; thousands of 
companies and entire sectors lived and mostly flourished heedless of the 
struggles I shall describe. Yet from the 1960s on the state section was expanded 
and made into an instrument of clientelism, as had happened earlier with the 
social services. This distorted the historically close relationship between the state 
and the private sector. The state extended its power not merely by placing a tax 
on pubhc contracts in the form of bribes, but by influencing the context in 
which private industry and finance had to operate. As well as damaging the 
economy through interfering with the free play of the market and preventing 
private firms from growing, publicization provoked a defensive reaction. 

This reaction took the form of a struggle by the lay, elite families of Milan 
and Turin to resist the onslaught of Catholic business and finance linked with 
the DC. The conflict was masked by the open war that pitted the DC and the 
private sector against the PCI and trade unions, which both grew stronger after 
the autumn of 1969. Meanwhile these struggles fostered and hid the develop- 
ment of small industry, which flourished because the state was busy elsewhere. 
These three developments require a triple reading of recent Italian history, 
beginning with the Center- Left government of 1963. 



THE DANGERS OF ELECTRICAL POWER 

By 1963 the DC had ruled for 16 years. In Britain and Germany where the 
Right had been in power for similar periods, alternation took place. The Labour 
Party won the 1964 elections and the SPD entered the government via a grand 
coalition in 1966 before it began ruling without the CDU in 1969. In Italy 
alternation of parties remained impossible because the PCI was illegitimate and 
the PSI was too small to form the core of a coalition that excluded the DC. The 
only solution was to bring the PSI into an expanded coalition. This would give 
a measure of representation to the hitherto excluded working class and would 



84 THE CRISIS OF THE ITALIAN STATE 

provide an impulse for reform. After inordinate ruminations among the parties 
and their international patrons, Washington and the Vatican, the Center-Left 
government was formed in December 1963 with Aldo Moro as Prime Minister. 

Although some reforms were passed, such as the application of a hitherto 
ignored law that raised the school-leaving age, the Center-I^ft was a failure. 
The DC power system was in place and the Socialists were too weak to change 
it. On the contrary it changed them: the PSI was given a share of patronage 
spoils and the hold of the politicians on civil society was increased. Welfare 
continued to be awarded as a privilege rather than claimed as a right. Between 
1960 and 1970 the number of disability pensions almost tripled, rising from 
1.2 to 3.4 million.'' For the PSI cooption proved electorally disastrous and by 
1976 its share of the vote had fallen from nearly 14 percent to below 10 percent. 
The DC and its antagonist/ ally the PCI remained dominant in their respective 
spheres, and their clash was delayed until 1976-79. 

The PSI initiated the process that, while expanding public power over the 
economy, led to the distortion of the private sector that resisted and compro- 
mised, and to the growth of the state bourgeoisie. The price that the Socialists 
demanded for entering the Center-Left coalition, after the Piano Solo had 
caused them to give up the issue of the local authorities' control over land use, 
was the nationalization of the electrical industry. 

The demand was logical enough. In a country poor in energy sources 
electricity was enormously important. During the pre- 1939 years Edison was 
the bulwark of private capitalism and was constantly denounced for not 
producing more and cheaper electricity. By the 1960s electricity was publicly 
owned in many other European countries. Moreover the state sector was 
working well in Italy and indeed ENEL, the public electricity company, while 
unable to prevent the politicians from imposing bribes/taxes on firms that 
supplied it, has performed adequately. The nationalization of electricity did not 
serve, as the PSI hoped, as the model of planning and of a more rational society. 
But the real trouble lay with Edison. 

Shareholder compensation took the form of payments not to individuals 
but to the electrical companies, which found themselves with around $2.5 
billion to invest. This has been described as an enormous boost to private 
capitalism, but if so the companies largely wasted it. Of the five electrical firms 
two were predominantly owned by IRl and they flourished: SIP went ahead 
with the telephone business, while SME became a food company and by the 
1980s was coveted by private industrialists. The Centrale, which had among its 
main shareholders the Pirellis and the Orlandos, tried desultory industrial 
ventures before concentrating on its financial component. This did well 
enough, but the Pirellis withdrew and the Centrale fell into Michele Sindona's 



The Publicization of the Economy 85 

grasp before passing to Roberto Calvi's Banco Ambrosiano. The fourth com- 
pany, SADE, was owned by established Venetian famiUes, the Cini and the 
Volpi — the family that had industrialized Porto Marghera earlier in the cen- 
tury — but they were happy to fuse with the petrochemical giant, Montecatini, 
at the price of losing control over their firm. Here was a sign that Italian 
capitalism had not overcome the fragility that it displayed in the years after 
Unification, and that the electrical dispute would sharpen the disputes in Italian 
society/ 

This was dramatically demonstrated by the adventures of Edison, which 
has undergone four transformations, at least three of them disastrous. They 
illustrate the difficulty that the private sector encounters when it moves into a 
high value-added area such as chemicals, and the way it falls back on support 
from a state that is unable to help but eager to exploit. 

Edison spent anything up to $100 million at first to avoid being nation- 
alized and then to ensure ample compensation. Here again corruption is not in 
itself the issue. Rather it is a sign that a company needs to buy political support 
because it cannot or is not allowed to cope on its own. Such bribery undermines 
both the free play of the market, which is manipulated by political favors, and 
the capacity of the state to set the rules of the game dispassionately. It leads to 
further evils like the distortion of information. Eugenio Cefis, the chairman of 
Montedison in the 1970s, had learned much from Enrico Mattei. Cefis bought 
// Messaggero, lavished money on // Corriere delta Sera, and with cavalier 
disregard for ideology gave smaller sums to the Catholic paper Avvenire ■asidi the 
Communist Paese Sera} The history of Edison demonstrates how industrial 
entrepreneurship takes third place behind political intrigue and financial jug- 
gling. In 1991 this would be the lesson of Enimont. Instead of constructing a 
chemical company, Raul Gardini spent his time manipulating the stock market 
to gain control of the firm, and then bribing politicians to get rid of it. 

In 1964 Edison had as its head Giorgio Valerio who had no clear strategy. 
He diversified with his compensation money, bought the Stan da chain of shops, 
and developed the petrochemical side of his company. But competition was 
tough since he had to contend both with Montecatini and with ENI. The easy 
part of the industry is the conversion of oil into basic petrochemicals. So all 
companies wish to concentrate on this, which crowds the field and cuts profit 
margins. Profit is greater at the top of the industry where complex chemicals 
are synthesized. However this requires technological expertise, lots of research 
and development, and long-term investment planning. Moreover the Italian 
market was distorted by the generous government grants available for invest- 
ment in the South. Since technical expertise and skilled labor were in especially 
short supply here, a string of oil-processing plants sprang up along the coast. 



86 THE CRISIS OF THE ITALIAN STATE 

Ecologically risky, they provided few jobs because petrochemicals is not labor- 
intensive, and they further sharpened competition. 

One obvious answer was merger and in December 1965 Edison and 
Montecatini came together in Montedison. It seemed sensible: Montecatini, 
run by Carlo Faina, had technical expertise but was in deep financial trouble, 
while Edison brought its compensation dowry. The new Montedison, while 
small in comparison with Du Pont or ICI, had 80 percent of the Italian chemical 
market and 1 5 percent of the EC market. Moreover its shareholder syndicate — 
the group of leading shareholders who come together to run the company — in- 
cluded a representative from IRI, which owned 16 percent of the shares, but 
also Gianni Agnelli and Leonardo Pirelli. They were a guarantee that the new 
company would remain private, as was the man who had engineered the merger, 
Enrico Cuccia. 

Private industry had never liked Mattel, had accepted with ill-grace 
Fanfani's organization of the public sector, and distrusted the PSI's talk of 
planning. Like the pre-war Edison, Montedison was to be the bulwark of private 
capitalism against the increasing inroads made by a state that had long since 
abandoned the noninterventionist philosophy of the Liberation. 

The best defense of a private enterprise is economic success, but Montedi- 
son had none. Faina had not wanted the merger, the two management teams 
never meshed and Valerio did not improve as an entrepreneur. Montedison's 
second adventure began in 1968 when Eugenio Cefis, the head of ENI, bought 
a block of its shares with the connivance of Enrico Cuccia. Cefis saw no reason 
to compete with Montedison when he could take it over. As the student protests 
of 1968 gave way to the Hot Autumn of 1969, Cefis strengthened his position. 
He sold bits of ENI's chemical sector to Montedison and in 1971 he moved 
across to become president. Montedison's second disaster was at hand. It had 
fallen victim to the most talented and dangerous representative of the state 
bourgeoisie. Agnelli protested that the agreement to leave Montedison private 
had been violated, but Cuccia supported Cefis. 



ENRICO CUCCIA: A DIRIGIST AGAINST THE STATE 

Cuccia has become a legend in Italy. Born in 1907 into a middle-class Sicilian 
family, he grew up in Rome where his father was a civil servant in the Ministry 
of Finance.^ He married the daughter of Alberto Beneduce and was taken into 
Comit by Raffaele Mattioli. One cannot help thinking that Cuccia's bid in early 
1994 to gain control of the privatized Comit was a deeply personal matter. In 



The Publicization of the Economy 87 

the 1930s Cuccia belonged to what I called a group of "French" dirigists without 
a French state. After the war Mattioli and others saw the need for a merchant 
bank that could acquire shares in, and make long-term loans to, companies. A 
1936 law had separated banking from industry in order to avoid a repeat of the 
crash when the collapsing industries had brought the banks down with them. 
But this left a gap, which loomed all the larger because of the weakness of the 
stock market. It was partially filled by the banks rolling over short-term loans, 
but the need for a bank that would service industry remained. So Mediobanca 
was created and Cuccia was appointed president. 

Mattioli's expectation was that Mediobanca would promote new indus- 
tries and provide venture capital, but Cuccia did nothing of the kind. Instead 
he bought blocks of shares in the leading companies, arranged mergers and new 
share issues for them and acted as their consultant. He helped them put together 
the shareholder syndicates, which allow small groups of important people to 
control a company without owning more than a relatively small percentage of 
its stock. He set up the interlocking holdings, which permitted the Agnellis to 
defend the PireUis and vice versa. If Ugo La Malfa, another Sicilian who came 
north, was the political voice of the northern lay business elite, Cuccia was its 
financial advisor and confessor. When Italian capitalism demonstrated its 
fragility, he was called in. Mediobanca would put up money in return for 
controlling the errant company's behavior. It would bully other banks into 
putting up much more money in return for much less control. It would stitch 
together new shareholders syndicates with the same famous old names. At 
present Cuccia is attending to Ferruzzi; Salvatore Ligresti's construction and 
insurance group is another patient; and Fiat seems settled. 

The Ferruzzi family are suffering at Cuccia's hands for they have been 
profligate, while he admires thrift and austerity. However their small sharehold- 
ers are suffering too. For their insurance company, the Fondiaria, Cuccia 
arranged a new injection of capital that only a few large investors can afford. 
The small shareholders would lose by it, whereas if Cuccia had arranged a 
takeover, they could have sold their shares at a profit. '° But Cuccia does not 
care about small shareholders. He wanted to let them learn that the market is 
dangerous. Cuccia does not like the market either and he tries to restrict its play. 

This is the Cuccia legend. A practicing Catholic, he defends the lay 
establishment. A believer in facts and figures, he admires James Joyce (another 
canny Catholic). When Michele Sindona allegedly told him he was planning 
the murder of the lawyer Giorgio Ambrosoli, Cuccia informed neither 
Ambrosoli nor the police." What could have caused him to make such a 
decision.' The belief that each man lives alone? Certainly whatever motivated 
him was informed by a scant sense of citizenship. 



8 8 THE CRISIS OF THE ITALIAN STA TE 

Another, less mythological way of understanding Cuccia is to look at him 
in our context of an invading state and a truculent but fragile private sector. 
His work now appears more important than the provision of venture capital. It 
is nothing less than the defense of a national capitalism. Here the constitution 
of Mediobanca is revealing. Until the 1980s the three public banks of national 
interest, Comit, Credito Italiano, and Banco di Roma, had a large majority of 
Mediobanca's shares. But in the shareholders syndicate they had only three out 
of six seats, whereas Cuccia's private sector supporters, like Pirelli or Lazard 
Freres, also had three seats, although they owned fewer than 10 percent of the 
shares. This was all the more ironic because the public banks collected the 
money with which Cuccia doctored the ills of the private sector. 

The 1989 privatization regularized but did not change the balance of 
power. The state banks reduced their share to 25 percent and Cuccia's cronies 
increased theirs to 25 percent, while 50 percent was placed on the market. As 
Credito Italiano and Comit went private, the state's share of Mediobanca fell 
to half of what it was. It has been said, amusingly but incorrectly, that when 
Cuccia got ownership of Comit, he would also own himself through Comit's 
approximately 8 percent share of Mediobanca.'"^ In reality Cuccia has always 
owned himself. If he supported Cefis's bid to take over Montedison, it is because 
he thought that Cefis, like him, would use public money to strengthen the 
private sector. 

Cuccia's role has been to resist the inroads of the DC-PSI state into the 
economy. This is why his great battles have been fought since the 1960s when 
the state began its invasion. The most famous of them was against Sindona. It 
is too simple to see Sindona's rise merely as the challenge of DC-backed finance 
against the lay finance of northern Italy, if only because two of Sindona's targets 
were Italcementi and Bastogi, which belonged to the Catholic, Carlo Pesenti. 
One cannot escape the concept of clans and it is more correct to see Sindona 
as the expression of one Catholic clan made up of segments of the Mafia, 
segments of the Vatican (although not lOR), and segments of the DC led by 
Giulio Andreotti, who had much influence over the Banco di Roma. As usual, 
the clan looked outside Italy for allies and found them in the Hambro Bank of 
London and in the United States where segments of the Cosa Nostra were 
helpful. Nor can one forget that the clans form and reform; in the battle of 
Bastogi Sindona did not have DC support, while Cuccia was allied with Cefis, 
who epitomized the state bourgeoisie and whom Agnelli had excoriated.'^ 

In 1971 the Centrale fell to Sindona, who wanted to fuse it with Bastogi 
to create a financial bloc. Bastogi contained in miniature the entire history of 
the Italian economy. It was a railroad company that used the indemnity it 
received when the railways were nationalized in 1905 to become a financial 



The Ptiblicization of the Economy 89 

company. In the early decades of this century it was important in financing 
hydroelectric power. By the 1960s it had become a strongbox in which the 
northern families could deposit the shares of their companies. Only trusted 
friends were given keys to the box. Clearly Sindona did not qualify. 

Just when the Sicilian financier was about to make his bid, the new 
president of Montedison cast his eyes on Bastogi. Having established himself 
as president with public money from ENI, Cefis wanted to privatize himself in 
order to weaken the politicians' control over him. Bastogi owned a chunk of 
Montedison shares and Cefis planned to merge it with Italpi, a company 
that — in a familiar pattern of interlocking share-ownership — was owned by 
Montedison, but itself owned a bloc of Montedison shares. By owning Italpi- 
Bastogi, Cefis would own himself 

It has been argued that the battle of Bastogi was a struggle between two 
intruding state bourgeois,''' but this too is an oversimplification. Certainly Cefis 
could outbid Sindona in the quest for DC support, which is a sign that the DC 
did not believe that Cefis would be able to own himself, or that the steady steam 
of money that had flowed from Montedison to the politicians would Ary up. It 
is also true that Sindona, playing on the splits within the northern clans, 
convinced Cesare Merzagora, who distrusted Cuccia, to sell him the Generali's 
shares in Bastogi. But the real struggle was between the northern establishment 
and Sindona. Cuccia backed Cefis because he was gambling that the DC was 
wrong and that Cefis would run Montedison as an efficient private company. 
Pesenti simply thought anyone would be better than Sindona. 

The battle was fierce and the Cuccia-Cefis forces showed scant consider- 
ation for the small shareholders. Before merging Italpi with Bastogi they 
stripped it of worthwhile holdings, such as its participation in the Pavesi food 
company, and endowed it with a less valuable bloc of financial stock. '^ A 
reputation for neglecting small shareholders clung to Cuccia and was used in 
1994 by Romano Prodi in the argument over the Comit privatization. In 1971 
Sindona also raised the issue but it was lost in the fury of the takeover that he 
launched in September. His bid failed in part because Cuccia gained the support 
of the then Governor of the Bank of Italy, Guido Carli, which illustrates another 
aspect of the main power struggle. There is an alliance, subject to the usual shifts 
of loyalty, between the bank and the lay northern finance. 

The Sindona saga continued. Sindona was able to sell some of his now 
useless Bastogi shares to Cefis by threatening legal action over the issue of the 
small shareholders. He had his Banca Privata and he began to build up a financial 
group, Finambro. He also acquired the Franklin Bank in the United States. From 
1972 to June 1973, with Andreotti as Prime Minister, Sindona's affairs flourished. 
Amid the chaotic monetary instability he speculated on the lira and in December 



90 THE CRISIS OF THE ITALIAN STATE 

1973 he was hailed as a noble patriot by Andreotti. Since he was no longer battling 
Cefis, Sindona had behind him the DC and the Banco di Roma. 

However, in August 1973, Ugo La Malfa, then Treasury Minister, refused to 
allow Finambro to raise fresh capital on the market. Cuccia unconvincingly denied 
any role in the decision. The DC mobilized to save Sindona, and the Banco di Roma 
was ready. However Credito Italiano and Comit, which were historically lay, were 
not ready and the Banca Privata collapsed in the autumn of 1974. Sindona had no 
doubt who was responsible and he resorted to Mafia tacncs, threatening Cuccia. 

In April 1979 Cuccia went to New York and met Sindona at the Hotel 
Pierre. Informed that the Mafia had passed a death sentence on him, he still 
refused the demand that he help bail out Sindona with public money. Andreotti, 
who had lavished praise on Sindona, was once again Prime Minister, although 
his term was reaching an end. Cuccia returned to Milan where Giorgio 
Ambrosoli, who was unraveling the web of the Banca Privata's many illegalities, 
was killed in July. Meanwhile a top Bank of Italy official, Mario Sarcinelli, had 
been briefly thrown into prison by the Rome magistrates, proving their suscep- 
tibility to government pressure, because he too was unhelpful in bailing out 
Sindona and other DC-backed businessmen such as Nino Rovelli of SIR. The 
governor of the bank, Paolo Baffi, was saved from prison only by his age and 
fragile health. It is tempting to think that Andreotti was able to take such steps 
because of the prestige he had acquired as the man who could outmaneuver the 
PCI. As for Sindona, he died in prison, probably poisoned. 

His case turned into a clear example of the struggle between entrepreneurs 
or financiers backed by the Christian Democrat state, and the lay, private 
businessmen of the North. It is, however, too Manichaean to be typical. In 
general, relations between the two alternated between hostility and uneasy 
cooperation. Cuccia distrusted Rome but was willing to gamble on Cefis; La 
Malfa's Republicans were a perennial coalition partner of the DC, while 
enjoying the support of the northern families. But the private industrialists were 
all too aware that the balance of power between Rome and the North was 
threatened by the creeping publicization of the economy. Against this trend 
Cuccia was a bulwark. 

Inevitably he had the defects of his merits. He showed scant interest in 
developing his native South and he distrusted high technology. By his liking 
for shareholder syndicates formed behind closed doors Cuccia discouraged new 
entrants onto the stock market and the formation of new, powerful groups. Not 
coincidentally, an expanded stock market and a larger number of financial firms 
would have weakened Mediobanca's posidon. 

In his favor one might suggest that Cuccia was/is not a defender merely 
of the mighty — the Agnellis and Pirellis. He was eager to welcome upstarts such 



The Publicization of the Economy 91 

as Salvatore Ligresti or Cefis, provided that they played by his rules, which were 
different from those of the state bourgeoisie. It is hard to imagine that he thinks 
highly of Fininvest. Berlusconi loves spending and publicity, both of which are 
anathema to Cuccia. It comes as no surprise that Cuccia's estimate of 
Berlusconi's debts is twice Berlusconi's estimate."" Cuccia is not just a clan 
chieftain for he believes in an establishment: an elite that behaves properly and 
sets an example of work and efficiency. 

His achievement is to have protected Italy's handful of big, private 
companies against the intrusions of the state. The price is that they remain a 
handful and that they are not big enough. There is a causal connection between 
DC and PSI publicization of the economy and the exiguous, family-based 
private sector. A limited but strong state, which ran the public services well, 
would have provided space and encouragement for a larger private sector. In 
such a state Cuccia might have been a great dirigist. In Andreotti's Italy he could 
only fight with James Joyce's weapons of silence and cunning. 



ABUSING THE PUBLIC SECTOR 

While Cefis was consolidating his position at Montedison, he was helped by a 
new public holding company called Egam. Montecatini owned a mining firm 
called Monteponi-Montevecchio, which was a perennial money-loser; Cefis 
handed it over to Egam. He wanted to rid himself of a Montedison executive, 
Giampiero Cavalli; Cavalli was named to the board of Egam.''' 

This seeming boon to private industrialists was invented in 1970 by the 
Minister of the Public Sector, who was none other than Flaminio Piccoli. 
Antonio Bisaglia also approved of it and both men used it to pursue two forms 
of clientelism. Its charter was to take over failing mining companies, whose 
workers could be expected to show their gratitude in the voting booth. In itself 
this does no great harm, but Egam, directed by Mario Einaudi who was a faithful 
servant of the DC and belonged to the Doroteo faction, went further. It bought 
useless companies in other spheres like manufacturing and transport. As well as 
taking several companies off Cefis's hands, it bought companies that were 
already in the public sector, such as Monte Amiata that belonged to IRI.'^ 

Einaudi created a large public holding that had no prospect of becoming 
profitable. In three years Egam acquired 40 companies with a turnover of $400 
million. For this it received a parliamentary grant of $200 million and its 
companies were eligible for many other kinds of government subsidies. Clearly 
this is different from what I have hitherto called clientelism. It is likely that 



92 THE CRISIS OF THE ITALIAN STATE 

Egam bought some of its companies at prices that were too high and that the 
lucky sellers kicked back some of their gains. But that is mere corruption. The 
most important issue is the use of public money to create a fictitious economic 
entity, which in turn spawned an all too real group of state bourgeois who 
exercised power and interfered with the market. In the long run this weakens 
the private sector, despite providing it with a rubbish bin. 

Egam prospered until 1975 when it made a mistake, from which it never 
really recovered but which illustrates how it operated. It took over a Genoese 
group. Villain e Fassio, which owned ships, as well as insurance companies and 
two newspapers, // Corriere mercantile and La Gazzetta del Lunedi. Insurance 
was a long way from Egam's charter and newspapers are politically sensitive.'^ 
Significantly Giorgio La Malfa led the charge in La Stampa, while the PCI 
joined in. Not only had Egam paid $ 1 1 million for 5 1 percent of a group whose 
real total worth was around $7 million, but it had borrowed the entire sum at 
an interest rate of 17 percent from a savings bank run by a Doroteo. The 
probable logic of the venture was not economic but political. The Dorotei 
wanted the two newspapers because the main Genoese paper, Secolo XIX, was 
anti-DC, but more particularly because the papers were to be used against the 
DC chieftain in Liguria. Paolo-Emilio Taviani had left the Doroteo current in 
1967 and had later returned, but was, along with Mariano Rumor, a target of 
the younger leaders like Bisaglia, who was by now Minister of the Public Sector. 

This is an extreme example of how the public sector was run by the rules 
of clan warfare. When the bill for the economic miracle had to be paid from 
the 1960s on, the burden of payment fell on the state. Even the nationalization 
of the electrical industry may be seen in this context: the PSI presented its bill 
for the 16 years it had been (self-)excluded from government. But the Christian 
Democrats were not at all unwilling to pay — provided they could use public 
money. The nationalization changed the Socialists from enemies into junior 
partners. 

In general the need for the public to reinforce the private sector offered 
the opportunity to expand DC power in both sectors. IRI and ENI were well 
run until the 1960s, when the initial failure to define their role proved 
damaging. They were unable to move out of sunset industries like basic steel, 
they had to bail out the increasing number of lame ducks, and they had to be 
accommodating to worker demands. They continued to have their successes: 
Alfa Romeo made money and was sold to Fiat in 1986, while at the same 
moment the SME could have been sold to De Benedetti. But haphazard 
conglomerations of holdings such as IRI and ENI were unusually vulnerable to 
the vagaries of the world economy. So the 1970s were especially difficult, while 
the 1980s saw improvement. The downturn that became evident in 1991 was 



The Publicization of the Economy 93 

all the more difficult because the EC, moving inexorably toward the Internal 
Market, did its best to block Italian government subsidies. 

The gravest weakness of the public sector lay in the political criteria that 
had become its scale of values. It existed to provide jobs and money for DC-PSI 
supporters; it was a resource with which to buy consensus and finance feuds. 
These values spread to the private sector. Bribes paid for public contracts were 
not just a tax, but also a subversion of entrepreneurial values. Efficiency vanished 
along with honesty because it too was useless. Once more corruption was a mere 
part of publicization: the battery of government subsidies and the selective 
control of credit were just as pernicious. Private capitalism produced its own 
state bourgeoisie because political influence replaced market competitiveness. 
Guido Carli concludes: "We have taken responsibility from the entrepreneur 
but we have not done away with him. We have opened the road to state 
intervention but we have not planned it. We have corrupted socialism and 
capitalism alike. "^'^ Carli distinguished between the 1950s when there was an 
establishment — Valletta, Mattei, Menichella — and the 1970s when, despite 
Cuccia's efforts, there was none. 

When Romano Prodi returned to head IRI in 1993, he confronted a 
holding that had lost $3 billion the previous year. However Prodi had an 
advantage over his predecessors because the political criteria lapsed with the 
switch from the old regime to the Ciampi government. Whereas DC and PSI 
had resisted privatization because of the Egam syndrome, Prodi was able to sell 
off Credito Italiano and Comit, which brought IRI some cash. Many unsalable 
chunks of IRI are heading for liquidation. 

The difference in the problems Prodi has inherited may be illustrated by 
two brief examples from Finmare. Its ferryboat section, Tirrenia, has large debts, 
but they stem in part from the burden of having to maintain a service to the 
small islands; this represents a public good, which may justify the financial loss; 
however, in Finmare's past lies the "golden ferryboats" scandal when it rented 
boats from a private shipping firm at an enormously inflated price. ^' This 
represents collusion between the two segments of the state bourgeoisie. 

In the 1992 collapse of EFIM the world recession was a catalyst, but the 
causes were Italian. Founded in the postwar period as a fund to help the 
engineering sector, EFIM grew from the 1970s on. It acquired food companies 
in the South that soon showed enormous losses. It began selling bits of itself to 
other bits of itself in order to show paper profits, while real money passed to 
the politicians. Its financial section, Safim, was headed by Mauro Leone, son 
of President Giovanni Leone who resigned after corruption charges, and was 
himself implicated in the Clean Hands investigation.^^ For years EFIM had 
been an economic fiction. The world recession reintroduced reality. 



94 THE CRISIS OF THE ITALIAN STATE 

The heart of the empire buik by the state bourgeoisie lay in certain banks. 
Control of credit was indispensable both for simple clientelism and for the 
creation of vast financial fictions. Some 80 percent of Italy's banks are publicly 
owned: the savings banks are run by the central government, which chooses 
presidents using political criteria. Many banks are perfectly well run and even 
the usual criticism that there is too great a number of them should be treated 
with caution. ^-^ However, some banks in the South have been infiltrated by 
organized crime because of its need to launder money, while bank presidents 
chosen for political reasons tend to lend money for the same reasons. Moreover 
the secrecy that surrounds banking transactions fosters abuse. 

That bankers should break the law, is unsurprising. However, when 
Roberto Mazzotta, the head of Cariplo, the largest savings bank in Italy, was 
arrested by the Milan magistrates, it did not appear coincidental that he had 
been appointed to his post without ever having worked for a bank, but with 
much experience in Christian Democrat politics. A week later the president of 
the Banca Nazionale del Lavoro, Giampiero Cantoni, a Socialist appointee, had 
to resign. This was ironic because he was appointed in 1989 after the previous 
president, Nerio Nesi (PSI), and his deputy, Giacomo Pedde (DC), had been 
forced to resign in the arms-for-Iraq scandal. 

The BNL's role illustrates the dangers of a banking system that is shaped 
by the DC-PSI power structure. The Italian government, eager to please the 
United States but also pursuing its own pro-Iraq policy, wanted to help the U.S. 
government to break U.S. law. Some top BNL people considered it natural to 
lend a hand and the vehicle chosen was the BNL's Atlanta branch. When the 
bank's officials reported on the irregularity of the Atlanta operation, they were 
ignored. The Italian and American secret services knew all they wanted to know. 
When the scandal broke the Italian government made scapegoats of Nesi and 
Pedde, but protected the bank against prosecution by the U.S. Department of 
Justice. The BNL probably lost money but that barely mattered, since its 
finances depended not on its performance in the market but on the DC-PSI 
power structure. ^'^ 



THE POLITICS OF THE PUBLICIZED ECONOMY 

The Atlanta case is interesting precisely because it reveals the political context 
in which the state bourgeoisie operated. Sindona's links with the Mafia and the 
BNL's dealings with the secret services were not typical of the publicized 
economy, but neither were they coincidental. The development of entrepre- 



The Publicization of the Economy 9 5 

neurship in the Mafia, Camorra, and 'ndrangheta was spurred by the state 
bourgeoisie. The Piromalli family was allowed to acquire a fleet of trucks and 
take over transport in Gioia Tauro by the companies and civil servants who ran 
industrial development in the South along clientelistic lines. Organized crime 
fit into the publicization process, which ignored the laws of state and market 
alike. The Mafia's need to launder drug money meshed with the onslaught 
launched by Catholic finance against the northern elite. After Sindona, Calvi 
was the point of contact. Carmine Alfieri was different from the non-Camorristi 
businessmen who won government contracts after the Naples earthquake 
because he used violence. But he shared with them the priority awarded to 
political connections over market efficiency. 

The secret service, which protected and threatened the political system 
while taking sides in its feuds, performed the same functions for the publi- 
cized economy. Its role was most obvious in arms dealings like the BNL-Iraq 
venture or EFIM's attempts to sell its Agusta helicopter. In general interna- 
tional ventures required help from the secret service: it watched over trade 
with Qaddafi, which took the form of arms for oil, with bribes at both ends. 
The Magliana band in Rome provided a network for right-wing terrorists 
such as Valerio Fioravanti; members of the secret service like Pietro 
Musumeci, who drew on its arms supply for the explosive he helped place 
on the Milan-Taranto train; Mafiosi such as Pippo Calo who wanted to 
establish himself in Rome; and businessmen like Flavio Carboni who en- 
gaged in property speculation on the Sardinian coast and was Calvi's associ- 
ate. One member of the band was even found to be in possession of a check 
made out to Andreotti by Nino Rovelli, owner of the SIR petrochemical 
company. ^^ 

A central role in the ideology of the state bourgeoisie was played by 
anti-Communism. The overlap with right-wing terrorism, the secret services, 
and the P2 heightened but did not create this anti-Communism, which 
animated respectable entrepreneurs like Silvio Berlusconi. The reason is not 
merely that there had to be a Communist threat to justify the DCs permanent 
hold on government, which made publicization possible. Rather the state- 
financed fictions and banks such as the Ambrosiano or the BNL, which 
frequently departed from market rules, could masquerade as champions of free 
enterprise by using the rhetoric of anti-Communism. 

It was logical that the BNL should employ so many members of the P2 
lodge, which was both a center for right-wing extremists contemplating a coup 
to save Italy from Communism and an association of members who helped 
one another make money. There was no contradiction between the two. 
Absent from the P2 were the members of the northern dynasties — Cesare 



96 THE CRISIS OF THE ITALIAN STA TE 

Romiti boasts that not a single Fiat employee was a member — whereas the 
state bourgeoisie was well represented by Giorgio Mazzanti and Leonardo Di 
Donna of ENI, as well as Berlusconi. One of the P2's triumphs was to win 
control of what had been the voice of the lay elite, // Corriere della Sera. Its 
editor, Angelo Rizzoli, who gained control of the paper in 1974 with backing 
from Cefis, was enlisted by Gelli. It is tempting to argue that the P2 was waging 
the war of the state bourgeoisie against the Cuccias and the Agnellis, rather 
than against the PCI. 

However, this suggestion does not hold up, if we consider the relationship 
between the growth of publicization and the advance of the Left. It was precisely 
during the late 1960s and the 1970s, when the student/worker protest move- 
ment peaked and when the PCI's share of the vote grew, that the public sector 
expanded. Cefis took over Montedison. Sindona and Calvi rose to wealth and 
the taxpayer's money poured into the coffers of DC-backed entrepreneurs like 
Nino Rovelli. One reason is that anti-Communism was a particularly useful 
cover at this time. Another explanation is that the private sector was so weakened 
by worker militancy that it could not prevent the shift of power to the state 
bourgeoisie. Indeed left-wing anti-capitalism allowed the DC to expanded the 
state's power and hence its own. 

Moreover the Left was culturally unprepared for the dispute between state 
and private capitalism. Rinascita p\ih\\s\\cd thoughtful articles on Montedison^'' 
and Egam, while the PCI toyed with the notion of a "producers' pact" between 
the enlightened, efficient capitalists and the trade unions. This was at the core 
of the PDS's election program of 1994, but in 1975 the PCI was both too 
anti-capitalist and too eager to strike a deal with the DC. Giorgio Amendola 
might have been the man to bargain with the northern industrialists, but he 
grew increasingly more isolated in the PCI. The New Left was too genetically 
and too virulently anti-capitalist to tolerate any producers' pact. 

The first sign of such an agreement was the 1975 deal between the 
Employers Association and the trade unions for wage indexation, a deal that 
turned out badly for both sides. The austerity of the historic compromise and 
the so-called EUR line should have pleased employers, but the union leadership 
did not control theshopfloorand Romiti was planning as early as 1976 to defeat, 
rather than negotiate with, the workforce. ■^^ His strongest supporter was Cuccia. 
Agnelli had previously struck a bargain with Cefis, which allowed him to 
become President of the Employers Association with Cefis as Vice-President. 
Fiat was worried that the DC might use the 1973 oil crisis to weaken it.^^ The 
old dislike of, but dependence on, the Italian state reemerged at the moment 
of world economic crisis. The northern elite and the state bourgeoisie united 
against the working class. 



The Publictzation of the Economy 97 

CHEMICAL WARFARE 

Montedison, which was engaged in a difficult, competitive industrial sector, 
but was also a honey pot for politicians, remained at the center of the power 
struggles, which went on both during the common war against the Left and 
after the Left's defeat in the autumn of 1980. Various threads run through the 
struggles: the would-be establishment's attempt to put down two different 
rebellions, the demise of a proud family firm, further inroads by the state 
bourgeoisie, and shifts of power within that bourgeoisie. 

Cefis proved a disappointment to Cuccia because he was less an entrepre- 
neur than a politician. Cuccia's gamble failed: Cefis was not able to turn 
Montedison into a successful, private chemical company. However Cefis's 
position within the state bourgeoisie was weakened by the decline of Fanfani, 
who was blamed for the DCs defeat in the 1974 divorce referendum. By the 
1 976 elections the two dominant figures in the party were Moro and Andreotti, 
who had Nino Rovelli in his clan. The next year Cefis resigned. His exit marked 
the end of the period when heads of the public sector conglomerates exercised 
great power in their own right. Where Mattel had run ENI, conducted his own 
foreign policy, and exerted more influence over the DC than its leaders, Gabriele 
Cagliari knew that he owed his position at the head of ENI to the Socialists and 
throughout the Enimont affair he did their bidding. 

After Cefis left, the third adventure of Montedison began. The Mario 
Schimberni reign would not be a disaster, but it would represent a rebellion, in 
the name of popular capitalism, against the Cuccia model of interlocking family 
holdings. ^'^ It began, however, with an alliance between the two men who set 
about further reprivatizing Montedison. Cuccia enlisted the Agnellis, the 
Bonomis, and others to buy a block of publicly owned Montedison shares in 
1981. This was the period of the P2 revelations and the state bourgeoisie was 
temporarily weakened. The next year Schimberni fulfilled his part of the bai-gain 
by following in Romiti's path and laying off 40,000 workers. The declining 
price of oil in the mid-1980s helped Montedison achieve a stronger position. 

The improvement, along with the stock market rally, triggered a rift 
within the family-based private sector. Schimberni raided Fondiaria (1986) and 
the Bonomi family's financial company Bi-Invest (1985). The establishment 
abandoned Carlo Bonomi but it bitterly resented losing the Florence-based 
insurance company, Fondiaria. To Cuccia it was both his territory and territory 
shared by the families. By conquering it Schimberni had upset the balance of 
power essential to the establishment and Cuccia did not forgive him. 

Schimberni, who came from a poor Roman family, had already alienated 
the elite. He then challenged it directly when he announced a huge share issue in 



98 THE CRISIS OF THE ITALIAN STATE 

1987. His aim was to dilute the ownership of his company and leave its president 
with greater power. For this, Schimberni has been praised as a forerunner of the 
broad-based, Anglo-Saxon capitalism to which Romano Prodi tried to lead Italy 
with the privatizations of Credito Italiano (1993) and Comit (1994). Certainly 
Schimberni was challenging Cuccia, who feared that a company without a "hard 
core" of wealthy owners united in a shareholders' syndicate would be too weak to 
resist the inroads of the state bourgeoisie. 

The second half of the 1980s was a difficult period for Cuccia because 
general prosperity and a broadened stock market were jeopardizing Medio- 
banca's role as a source of capital and the center of shareholder syndicates. 
However the Wall Street crash of October 1987 ended Schimberni's hopes of 
a share issue. In the meantime the families had found a new champion in the 
Ferruzzi group and its chairman, Raul Gardini. The Ravenna family had 
built an empire out of grain shipping and food. Serafmo Ferruzzi had taken 
over Eridania, which had traditionally refined and marketed the sugar beet 
grown in the Po Valley. He and his son-in-law, Gardini, who became 
president in 1980, turned Ferruzzi into the second-largest company in Italy. 
Determined to diversify and to grow Gardini launched a successful takeover 
of Montedison in 1987. With a company that had a turnover of $4 billion, 
he gained ownership of a company that had a turnover of $9 billion. He 
blocked the new share issue and dispatched Schimberni, which pleased 
Cuccia, but he kept Fondiaria, which did not. The fourth adventure of 
Montedison was starting. 

It unfolded between 1987 and 1993 and offers themes that are character- 
istic of the Italian private sector. The secrecy of family capitalism, the way 
decisions were made without consulting shareholders, its close relationship — 
despite the 1936 law — with banks are all present. If Gardini's energy and 
ambition were also typical — he reminds one of Carlo De Benedetti who tried 
to take over a company that represented one third of Belgium's GDP — so, albeit 
in exaggerated form, was the social fragmentation he created. Alien to any 
notion of an establishment or of a balance of power, he rejected the alliance 
with Cuccia. Even the Ferruzzi family itself broke up. Finally Enimont reveals 
the struggle but also the symbiotic relationship between family capitalism and 
an ever stronger state bourgeoisie. 

In 1989 Gardini made two attempts at expansion. He tried to corner the 
soy market on the Chicago exchange and incurred losses estimated at $300 
million. Of these $200 million were charged to Montedison, which was hardly 
fair to the other shareholders.^' Like most family holdings, the Ferruzzi group 
was a maze of different companies — Montedison, Ferfin (Ferruzzi-Finanzia- 
ria), which was the group's financial arm, Serafino-Ferruzzi, which was the 



The Publicization of the Economy 99 

family's own financial center, and many others. This allowed great freedom in 
moving money and shares around. It made a true evaluation of the financial 
situation difficult, and this was compounded by the lax Italian laws about 
disclosure of information even in publicly quoted companies. Gardini took 
full advantage of such freedom, indulging in ill-named "back to back" opera- 
tions. Funds transferred from some companies (especially those that were 
publicly owned) to other companies (usually those owned only by the family) 
were never transferred back.^^ There was also a Group Services Consortium, 
which undertook tasks like security or publicity for the various companies and 
drained them of money. 

Gardini 's second venture of 1989 was a return to the Cefis strategy of 
mixing private and public. In yet another attempt to form an advanced chemical 
group in Italy, Montedison and ENI set up Enimont, where 40 percent of the 
shares were owned by each partner and the remaining 20 percent were placed 
on the market, with Montedison and ENI pledging not to buy them in order 
to secure outright control. Such an initiative seemed implausible. By 1989 ENI 
was securely under the control of the PSI, and the chemical industry's historic 
role of providing slush funds for the parties made it unlikely that they would 
simply watch from a distance. In 1990 Gardini went on the attack and along 
with his associates he bought just over 10 percent of the remaining Enimont 
shares and gained outright control. 

Again it is hard to imagine Gardini's plans. Did he seriously want to 
succeed where Cefis and so many others had failed and build a chemical 
company that could compete with Du Pont or ICI? Did he think the state 
bourgeoisie, reinforced by 14 years of Craxi's leadership of the PSI, would 
simply accept its defeat? Gardini is alleged to have previously paid the politicians 
$10 million to obtain a tax concession for Enimont, which never materialized. 
Surely that was a warning. Or was he planning from the outset to sell his shares 
to ENI at a profit? 

ENI and its political mentors responded by obtaining from Judge Diego 
Curto a decision that the shares acquired by Gardini and his associates (just over 
10 percent) be sequestered. Gardini, who had scant faith in the fairness of the 
judicial system, took this as a sign that the state bourgeoisie would not permit 
him to take over Enimont. He now sought only to sell back his shares to ENI 
at the maximum profit, which meant paying the maximum in bribes. In January 
1991 the taxpayer bought back Gardini's shares for $1.9 billion, in return for 
which Gardini allegedly paid $90 million to the politicians, the largest sum 
supposedly going to Bettino Craxi as the "owner" of ENI. ^^ 

Once more Italy was without a major chemical company. Once more the 
parties and a family cooperated to make a profit. However in June 1991 Gardini 



100 THE CRISIS OF THE ITALIAN STATE 

broke with the Ferruzzi. In June 1993 came a dual crisis: the debts which the 
Ferruzzi group had incurred in its race to expand became unsustainable and the 
Milan magistrates turned their attention to Enimont. Gardini committed 
suicide and a victorious Cuccia was called in to stitch together a family firm 
without a family. 



CONCLUSION 

The Ferruzzi saga is a tale about the relationship between public and private in 
the Italian economy. The size of the bribe as well as the politicians' ability to 
control ENI and to dictate to Montedison marked the conclusion of a process 
that began with the nationalization of Edison and the distortion of a public 
sector, which had worked well in the postwar years. The characteristics of this 
process were the use of public ownership not merely to protect otherwise 
uncompetitive industries, but also to create fictional companies that had no 
economic reason to exist but that expanded the power of the state bourgeoisie. 
In turn this weakened the private sector, limited its room for growth, and left 
in place the nucleus of family-owned big companies that were strong enough 
to face the marauding Roman hordes. 

These two made a tacit agreement, which each tried to change to its 
advantage. The state did not create a free market by extensive antitrust legisla- 
tion, did not protect the small shareholder, and watched while publicly owned 
banks made dangerous loans. In return the companies paid bribes/taxes on 
public contracts and did not foster opposition to DC-PSI rule. The struggle 
between Catholic finance and the northern lay elite took place within the 
framework of this agreement, although it also threatened it. Mediobanca 
defended the northern establishment both against the state and against pressure 
for wider share-ownership. The state bourgeoisie gained ground but overex- 
tended itself. 

This struggle, riddled with internal factional disputes and stabilized 
during temporary truces, has been overtaken by developments inside and 
outside of Italy. Increased international competition has left the family dynasties 
uncertain that they can compete without modifying their structure: as an 
example, Fiat has gone through a year of change. The collapse ol Ferruzzi should 
not, however, be seen as the symbolic death of family capitalism. Pirelli 
recovered from its catastrophe: its bid for the German company Continental. 
The batde between Cuccia and Prodi has been won by Cuccia but it was far 
from a simple struggle between old and new forms of capitalism. One of the 



The Publicization of the Economy 101 

best developments of the Clean Hands operation is the pressure to regulate the 
stock market by providing more information on shareholder syndicates.^'' 

In 1974 Eugenio Scalfari perceived the emergence of the state bourgeoisie 
as marking the decline of the private entrepreneur. The fate of the Volpis was 
sealed and even Fiat seemed to him weak.^^ His pessimism was, however, 
unwarranted. New entrepreneurs have emerged in recent years: Callisto Tanzi 
of Parmalat, Benetton, Stefanel, and many others. Indeed the private sector, 
while it still contains too few big companies, does not lack dynamism. Small 
firms have developed, blissfully indifferent to Cuccia as to Sindona. 

What of the state bourgeoisie? It has been the prime target of the Clean 
Hands investigation and Italian opinion is aware of the need to separate public 
and private enterprise. Yet the Right's victory in the 1994 elections remains 
ambiguous. 

There was an ominous ring in the Lega Nord's response to the arrest of 
the Cariplo president, Mazzotta: The leadership of the Milan bank must be 
changed "to take account of the new expression of the will of the people. "^^ Is 
this Lega clientelism? It would appear so. 



Enrico Berlinguer and 
the Historic Compromise 



In the present Italian debates the name Berlinguer is rarely invoked. The 
commemorations that marked the tenth anniversary of his death seemed 
perfunctory, which is odd since his death triggered a genuine outburst of 
emotion. All Italy stopped for his funeral, and sympathy took political form a 
vi^eek later in the European elections when, for the first and last time, the PCI 
gained more votes than the DC — 33.3 percent to 33 percent. It was a funeral 
wreath for the man, rather than for his party or policies. Still Berlinguer deserves 
attention today because he was the only leader who made "the moral question," 
which was his forthright way of referring to systemic clientelism, into the central 
issue of Italian politics. He did so clumsily, but he may be said to have 
anticipated the Clean Hands investigation. 

Moreover in the years after 1979 he struggled to face up to the failure of 
Italian Communism. He remained a Communist, seeking to give a fresh 
meaning to the creed but also to preserve what he considered its values — rigor 
and self-sacrifice. If he is neglected, it is partly because such an effort seems 
hopeless today. However both then and earlier Berlinguer helped instill into 
the PCI the sense that Italian public institutions were precious and must be 
defended. He himself defended them against the terrorism of the Red Brigades, 
at a cost to his party. 

The main reason Berlinguer is neglected is that his great adventure, the 
historic compromise, the meeting of Communist and Catholic culture that took 



104 THE CRISIS OF THE ITALIAN STATE 

concrete form in the governments of National Solidarity of 1976-79, was a 
failure. ' It is important because it marks the postwar order's only serious attempt 
to reform itself. When it failed, that order began its decline. After 1979 neither 
the PCI nor its ally/adversary the DC was ever again as strong as it had been. 
Part of the failure was the short-lived attempt to reconcile the working class and 
the industrialists in an Italian version of the "Austrian" solution. 

The situation out of which the historic compromise emerged has already 
been described. The international economic crisis triggered by the 1973 increase 
in oil prices was especially grave in Italy. One reason for this was the vulnera- 
bility of an economy that had grown so quickly: Italy imported 75 percent of 
her energy. The second reason was that the price for postwar decisions now had 
to be paid: the working class was stronger and more aggressive. It resisted 
deflation and in 1975 obtained wage indexation. Yet another reason lay in 
growing discontent with the DC. Bisaglia was lucid: "the country is tired of 
us."^ The DC had too many factions and too few new faces or policies. There 
was anger with clientelism and anger because there was no longer money for 
clientelism. Two decades of prosperity had brought a demand for social reforms, 
which was expressed in the victory for the supporters of divorce at the 1974 
referendum. Space was opening up for the PCI. 

This chapter is divided into four parts. The first updates my analysis of 
the Communists, the second deals with the domestic issues of the historic 
compromise, and the third with the international dimension. The fourth 
sections treats Berlinguer's last years. The aim throughout is to see the PCI's 
bid for power from the viewpoint of 1994. 



A COMMUNIST PARTY TRIES TO REFORM 

Berlinguer and Henry Kissinger agreed that the oil crisis would push Italy to 
the Left, but in retrospect they were wrong. The protest movements of the late 
1960s were subsiding, and even before the Arab-Israeli War the unions were 
concentrating on salary increases and job protection rather than on worker 
control. After 1974 the need for deflation shifted power back to the employers. 
Cesare Romiti claims he began to plan the restructuring of Fiat as early as 1 976.^ 
So the PCI's 1975 Congress took place at a delicate moment. The political 
tide was running strongly for the Communists but the long-term economic 
trend was not. In July 1975 their vote in the local elections would jump 6 
percent to 33.4 percent, which was only 2 percent below the DC. They needed 
to make a modest reform proposal, of which one ingredient was wage restraint. 



Enrico Berlinguer and the Historic Compromise 105 

Such things are not, however, the stuff of congresses. In September 1973 
Berlinguer had launched the historic compromise supposedly "in the light of 
events in Chile.'"^ In fact he had relaunched a policy that was rooted in postwar 
Italian Communist history. Although he would make the cover of Time the 
following year,^ Berlinguer was shy and had spent his entire adult life in the 
party organization. Like so many other university-educated young men he had 
been attracted by Togliatti's Salerno project. Too young to have ties with the 
Third International, Berlinguer was steeped in the culture of the postwar PCI. 
Ascetic and disciplined, he believed in the mystique of the Communist militant 
who has more duties than rights. He had also studied Gramsci and agreed with 
Togliatti about the importance of collaborating with the Catholics. 

Berlinguer's ancestors were Sardinian landowners and minor nobility. His 
grandfather moved to the Left and became a supporter of Giuseppe Mazzini, 
while his father, who was elected to parliament in 1924, took part in the 
Aventino breakaway. Berlinguer inherited the need to prevent any return of 
Fascism and the sense that Italian democracy was precious but fragile. He was 
close to his uncle, Stefano Siglienti, who was an economist and banker and an 
acquaintance of Ugo La Malfa. Berlinguer became the PCI secretary in 1972 
and held the post until his death. If Italians admired him, it is quite simply 
because they considered him more honest than other politicians. 

In his Congress address Berlinguer analyzed the international economic 
situation in language that used but updated traditional Communism. Lenin's 
theory of imperialism was being vindicated and capitalism was running out of 
markets. The OPEC countries had demonstrated that the Third World could 
no longer be easily exploited. More important, the working class had learned 
to defend itself and so "the traditional sort of deflation is no longer a valid 
solution. "*" This was a warning that the Italian government must not expect to 
run the economy as Einaudi did after 1947. Tight monetary policy and low 
wages would encounter tough resistance. 

Berlinguer accepted the need for deflation, but not the Christian 
Democrats' version because "they did not try to make choices and set priorities," 
and because nothing was done "to reduce waste, profiteering, luxury and 
speculation." The PCI would use deflation to create "new economic and social 
structures that are more productive and rational." Berlinguer called for "forms 
of consumption and life-style . . . which are better and also less expensive for 
the national community."'' This view, a blend of traditional Socialist collectiv- 
ism. Club of Rome end-of-growthism, and Berlinguer's own form of asceticism, 
would be a key ingredient in the culture of the historic compromise. 

Berlinguer, who knew little about economics, stressed that the real issue was 
political. He called for "a process which will gradually allow us to emerge from 



106 THE CRISIS OF THE ITALIAN STATE 

the logic of the capitalist system, and which leads the working class to take up its 
role of governing the nation." He linked the Gramscian notion of hegemony with 
the theme of collaboration between Communists and Catholics. His aim was not 
merely to create a left-wing coalition and to govern with 51 percent of the vote. 
Rather he stated that "all our proposals tend and must tend towards unity."^ 

Unity was one attribute of the historic compromise, an extremely difficult 
concept that Berlinguer had trouble clarifying. In its simplest sense it means 
nothing more than the coalition governments from 1976 to 1979 where the 
Christian Democrats had the support of the PCI, although there were no 
Communist ministers. However, that is not how Berlinguer saw the historic 
compromise. To him it was the meeting of the Communist and Catholic 
cultures, the twin forces that were shaping modern Italy. Their dialogue and 
the values they shared provided the framework for a political agreement. 
Berlinguer sought a conflictual but cooperative relationship with the DC that 
he accepted as the legitimate party of the Catholics. 

The link with the postwar PCI is clear. Berlinguer was building on the 
Togliatti-De Gasperi notion that the two mass parties would consolidate 
democracy in Italy. The time had come to emphasize the "alliaiice" component 
of the adversary/ally relationship. The Communists would participate in the 
government along with the Catholics, which would unblock the political system 
and resolve the problem of the unrepresentative Italian state. 

That is the aspect of the historic compromise that is most relevant to this 
study. There were other aspects, such as preventing the economic difficulties 
from causing a dangerous drift toward an authoritarian right-wing regime. 
Here, too, Berlinguer was demonstrating his sense of the need to reform the 
state. The trouble was that few non-Communists saw the historic compromise 
in this way, while few Communists could reconcile it with the rest of their 
beliefs. Berlinguer was unable to explain how the historic compromise would 
allow Italy "to emerge from the logic of the capitalist system." Many non- 
Communist Italians feared it would indeed have that consequence. 

Support for Berlinguer came from the union leaders, Luciano Lama and 
Bruno Trentin. Lama offered the CGIL as a responsible bargaining partner, 
willing to accept deflation in return for economic planning. Trentin went 
further and admitted a link between high wages and "a strike of productive 
investment."' Although he was then to the left of Lama, Tren tin's speech at the 
1975 Congress anticipated the conciliatory line he has taken in the present 
economic crisis, where he has traded wage restraint for defense of employment. 
In 1975 he could not do so openly, which introduced into the historic 
compromise the first of two ambiguities. The PCI saw in the oil price increase 
a crisis of capitalism and an opportunity to seize hegemony. 



Enrico Berlinguer and the Historic Compromise 107 

As I have argued in chapter 1, hegemony was "an act of faith. ""^ It led the 
PCI to neglect pragmatic reforms — as it had done at the Liberation — and to 
give priority to any and every increase in its own power. The belief that the 
Socialist society was waiting in the future shaped the party's policy in the 
present." During the three years of National Solidarity it failed to achieve the 
reforms that would have justified to its electorate its support of deflationary 
measures. 

The second ambiguity lay in the method chosen to strengthen the party 
and achieve hegemony, namely, the alliance with the DC. The PCI base was 
frequently anti-clerical and it viewed the DC as the arch enemy. This dislike 
was — and is — reciprocated by the Catholics. In the late 1960s the relationship 
between votes for the PCI and attendance at mass was revealing: where the 
Communist vote was 10 percent or less, mass attendance stood at 58 percent; 
where it was 40 percent to 50 percent mass attendance was down to 30 
percent.'^ The Catho-Communist Franco Rodano had influenced the PCI 
leadership but not the rank and file, and he had not influenced the DC at all. 

In 1975 conflict took precedence over collaboration and at the Congress 
Berlinguer declared that "the essential thing today is to defeat the line taken by 
the present DC leadership."'^ As secretary Fanfani served as the incarnation of 
the "bad" DC, which both placated the Communist base and pleased the 
increasing number of voters who were looking to the PCI as an agent of reform. 

There had, however, to be a "good" DC, which was popular and anti- 
Fascist. Berlinguer allotted this role to Aldo Moro who had shown some 
understanding of the 1968 upheaval. One doubts whether the theory of the two 
DCs had much validity and whether Moro's aims, as distinct from his tactics, 
were different from Fanfani's. It is difficult to speculate about what Moro would 
have done had he not been murdered, but from 1976 to 1978 he stranded the 
Communists in the area of government without decisive governmental power, 
which eroded their support in the country. My conclusion is that he sought to 
maintain the DCs central role in political life.''' 

Missing from Berlinguer's endless speeches about the DCs two souls is 
any serious analysis of the way it ran the Italian state and economy. He did 
attack clientelism, but he neglected its systemic character and the way that the 
DC had become inseparable from the state apparatus and the nationalized 
industries Only later did he see how deep the moral question went. When he 
dealt with the Church, he appealed to its ethical sense and ignored its desire 
simply to maintain its power. When the Council of Bishops called on the 
faithful to vote DC, Berlinguer responded by pointing out DC corruption. He 
was forgetting that the DC was the party that offered the Church the greatest 
share of power. '^ It is hard not to conclude that Berlinguer was worried by the 



108 THE CRISIS OF THE ITALIAN STATE 

shift to the Right in the early 1970s: the increase in the MSI vote in 1972, the 
bombs at Brescia and on the Italicus train, and the Chilean coup. Like Togliatti, 
he felt the PCI had no choice but to ally with the Catholics to legitimize itself 
and to prevent the return of Fascism. 

The historic compromise was attacked by two very different writers. 
Leonardo Sciascia saw rulers and opposition merging to bring about change 
without change. In 1 97 1 Sciascia had published // Contesto, in which a Christian 
Democrat minister declares that "my party, which has been misgoverning for 
30 years, has now decided that it would misgovern better in an alliance with 
the International Revolutionary Party."'^ In Candido (1977) the Palermo 
Communists turn into a mirror image of the Christian Democrats. 

In an oblique way Pier Paolo Pasolini's work reflects the two dominant 
strands of the postwar settlement. His ideals are a pre-capitalist, rural Catholi- 
cism and an anarchical, urban subproletariat. For the DC he had no use, but 
in the early 1970s he exalted the PCI as the only pure force in Italy. The historic 
compromise, he felt, was nothing more than a sellout, less to Catholic culture, 
which had also lost its authenticity, than to modernity. Technology and 
consumerism were stifling the very awareness that society could be different. 
Bologna, the PCI's model city where Pasolini had attended university, was 
better run than cities where the DC was in power, but it was a city "where 
precisely there is nothing different."''' 

Varying arguments came to the same conclusion. Far from establishing 
hegemony, the PCI would be drawn into the web of Christian Democrat power. 
Italy was looking for an alternative to the DC, but the only candidate was a 
party that wanted to ally with the DC. It needed the alliance because it was 
determined to remain a Communist party, pledged to overthrow both the DC 
and capitalism. Its bargaining power lay in its ability to control labor, but a 
Communist party could not endorse the Austrian solution. So wage restraint 
had to be masked as "sacrifices without compensation,"'^ made by a working 
class that had already assumed its hegemonic role. Or else austerity had to be 
presented as a working-class value, superior to the waste and selfishness of 
consumer capitalism. 

Berlinguer's language was vivid: key words were "decadence" and "de- 
cline"; Italy was menaced by "fragmentation." Decadence took the form of an 
"exasperated individualism," which left Italians "ridden with anxiety" and prone 
to "self-denigration." By contrast, the PCI offered "new human values" based 
on work, which would create unity. '^ In this moral discourse lies the vision of 
a reborn Italian state, but the political means of creating it were absent. At the 
moment of its greatest electoral success, when it gained 34.4 percent in the 1 976 
vote, the PCI was weaker than it seemed and the DC stronger. 



Enrico Berlinguer and the Historic Compromise 109 

If we turn to the more concrete matter of voters and members, we discover 
similar weaknesses. PCI spokesmen liked to point to an unbroken increase in 
votes from the Liberation on but this is misleading. Between the Constituent 
Assembly elections of June 1946 and the 1968 elections the PCI went from 
18.9 percent to 26.9 percent, which amounts to 8 percent in 22 years. Between 
1972 and 1976 the party's share jumped over 7 percent, from 27.2 percent to 
34.4 percent; previously its largest gain had been 2.6 percent, between 1958 
and 1963. A 7 percent increase was abnormal. 

Nor was the earlier electoral progress unmitigated by failure. In a party 
that took such pride in being a mass party the fall in membership was seen as a 
defeat. In 1947 at its highest point the PCI had 2,252,446 members, but with 
the departure from government and the Cold War, decline set in. In 1948 there 
were 2,1 15,232 members and by 1955 there were 2,090,006. The Khrushchev 
revelations and the invasion of Hungary reduced the army to below 2 million. 
Then the slide continued. It was briefly halted in 1964 but then began again 
despite the revival of worker militancy. In 1968 there were 1,495,662 members. 
Still more worrying was the slump of the Federazione dei Giovani Comunisti 
Italiani (FGCI). Its membership in 1968 was less than half of what it had been 
in 1948.20 

The PCI's achievement was to have survived as a Communist party in 
Western Europe and to have rooted itself in such organizations as the unions 
and the cooperatives. By 1970 it was the largest party in Emilia- Romagna, 
Tuscany, and Umbria (regions won by the Progressisti — along with the 
Marche — in the 1994 elections). In the most advanced industrial areas — Pied- 
mont, Lombardy, and Liguria — it was the second party, as it was in the 
northeast where the Catholic influence was stronger and the DCs lead greater. 
In the South, despite its Gramscian strategy of bringing together Northern 
workers and Southern peasants, the PCI lagged. Even the electoral growth was 
unsatisfactory. It had come largely at the expense of the Socialists and the high 
price the PCI would later pay came in the form of Bettino Craxi. The new 
recruits were predominantly working-class voters drawn from the subculture of 
the Left.2' The PCI was not yet able to draw many Center-Right or Catholic 
votes. So there was no inexorable movement toward hegemony. 

So the 1970s mark a break in the party's history. There was no inexorable 
Hegelian progression but rather an opportunity furnished by the wave of protest 
in Italian society. Yet despite the oil crisis, there was nothing in the voting patterns 
or in the general behavior of the Italian people to indicate that they had despaired 
of capitalism, much less that they discerned any alternative. The revolutionaries 
"remained a small minority" and their ideals of "social and economic equality, a 
coUectivist way of life and direct democracy" were antithetical to the fundamental 



no THE CRISIS OF THE ITALIAN STATE 

desire of modern Italians, which was and is for "each nuclear family to improve 
its standard of living."^^ Many people were becoming convinced that the DC was 
unable to help them in this task so they looked toward the PCI. Initially the 
historic compromise was appealing because it offered reform without risk. In this 
sense too it was a defensive strategy. 

As such it met with electoral success. In the divorce referendum Berlinguer 
was too prudent and, having done everything possible to avoid it, he was 
surprised at his margin of victory: 59.26 percent to 40.74 percent. However 
Pasolini was right in arguing that the victory was not for any kind of Commu- 
nism but for modernization .^'^ The PCI was attracting support from people who 
sought less religious authority over civil society. Next the local elections of 1975 
left the PCI as the largest party in most of Italy's big cities — Rome, Milan, 
Turin, Florence, Venice, and Naples. Here the Communists were rewarded as 
the party of honest, efficient administration. 

A discrepancy was arising between what the PCI was and why it was 
attracting people. Twelve years earlier Italo Calvino had written that the PCI 
"had taken on the burden, among its many other burdens, of being the ideal 
liberal party that had never existed in Italy. "^"^ He was prophetic because people 
were not voting for working-class hegemony or for austerity, but rather for 
reforms. It seems impossible that they were not voting for the Historic Com- 
promise that had become the PCI's banner; but they perceived it less as the 
Rodanian fusing of the Catholic and Communist traditions than as a cautious 
brand of reformism. 

This would explain the PCI's success in 1976 when it gained 3.5 million 
votes, of which 1 . 5 million were new voters, 1 million came from other left-wing 
parties, and 1 million from the Center- Right. ^'' Many of these were probably 
working-class Catholics, a natural target of the historic compromise. But a 
further discrepancy arose between the PCI's old electorate and its new 
supporters who were "more critical, more voluble and more unstable. "^^ Once 
the reforms did not come they would be more likely to desert. Moreover the 
speed with which this happened reinforces the view that the increase in PCI 
support in the mid-1970s was fragile. 

The same is true of membership. Immediately after 1 968 growth was slow 
and 1969 saw an increase of around a thousand members. However by 1972 
the party had grown to 1,584,659, foreshadowing the electoral rise. After 1972 
growth was faster and in 1976 there were 1,814,317 members. But then decline 
set in again and by 1979 there were only 1,761,297. Still more revealing was the 
number of new members. In 1977 the PCI attracted fewer than 100,000 new 
members, whereas in 1976 the figure had been 174,473. In retrospect the years 
from 1972 to 1976 represent an exceptional period in the party's history. 



Enrico Berlinguer and the Historic Compromise 111 

The first to depart were the young. In 1976 the party gained 38 percent 
of the new voters. They wanted change because unemployment in the age group 
16-25 was running at 14.4 percent. However the most radical of the young 
came together in the 1977 Movement, whose protest was directed primarily 
against the PCI. In February Lama was driven out of Rome University, while 
in September the movement took over Bologna. The PCI found itself in an 
impossible position. Although the movement was too extremist and too prone 
to violence to represent a valid political option, its culture "of our own 
needs" — of forcing shops to reduce their prices and of creating "free spaces" 
inside capitalism — struck a chord among young people.^^ At the very least it 
was more appealing than cooperation with the DC. In 1979 the PCI won less 
than 33 percent of the new voters, and the problem grew worse in the 1980s. 

The PCI's success also disintegrated rapidly in the South. It had won 23.7 
percent of the southern vote in 1972, 26.6 percent in the local elections of 1975, 
and 31.4 percent in 1976. But the Communists could offer nothing to replace 
DC ciientelism and in 1979 their losses were higher than in the country as a 
whole: 7.4 percent in Campania, 6.3 percent in Calabria, and 6.4 percent in 
Sicily, compared with 4 percent nationally.^^ 

These two examples indicate the difficulties that the PCI faced. It could 
hardly be expected to find instant remedies for youth unemployment or 
southern backwardness. Still these were two of the sources of discontent that 
accounted for its success in 1976. Moreover Berlinguer's prudence was justified 
because the DC vote held at 38.7 percent. It gained votes from the Right — MSI 
and PLI — in its role as a bulwark against Communism. This confirmed 
Berlinguer in his view that only the Catholics could confer legitimacy. The 
country was saying that it did not want the PCI as an alternative to the DC, 
but it was also saying that it did not want the DC. It probably wanted Calvino's 
ideal liberal party that it could not have. The postwar political system was 
showing that it could not reform itself. Next we shall see that it could not reform 
society either. 



FROM 1976 TO 1979: 
WAGE RESTRAINT AND DEFENSE OF THE REPUBLIC 

Berlinguer's decision to offer negative support to the post-election government 
by not voting against it was an attempt to strike a balance between antagonism 
toward and cooperation with the DC. The government was headed by Giulio 
Andreotti, the DCs most brilliantly devious representative, the incarnation of 



112 THE CRISIS OF THE ITALIAN STATE 

the postwar order. Berlinguer's conversations with Andreotti were deliberately 
vague. The reality of the historic compromise lay in the detailed discussions that 
took place among the government, the employers, the PCI, and the unions. 
Two aspects are crucial: the trade deficit caused by the oil price increase for 
which the solution was deflation, and high wage costs in a rigid labor market.^'' 
As the wage indexation agreement of 1975 had shown, there was a narrow strip 
of common ground between the employers who were willing to recognize — at 
least temporarily — the fact of union power, and the union leaders, who were 
concerned about investment and unemployment and who were regaining 
control over the shopfloor militants. 

The framework was set by a series of austerity measures, imposed by the 
Andreotti government in the autumn of 1976 and backed by the PCI. Interest 
rates went from 12 percent to 15 percent, tighter limits were placed on the 
acquisition of foreign currency, prices of government-controlled items such as 
tobacco, petrol, telephone services, and electricity were increased and modifi- 
cations were made in the wage-indexation system. The result of these measures 
was "a success that has few precedents in the history of Italian economic 
policy."^' Domestic demand was reduced by around 3 percent of GNP; by 
mid- 1977 the balance of payments was in the black, by mid- 1979 the foreign 
debts accumulated between 1973 and 1976 were paid off, and there was an 
investment boom. The "Austrian" solution was working. 

On wage costs the three-year contracts had already been signed at the 
national level so the government and employers wanted measures to improve 
labor productivity and moderation in company and plant level bargaining. 
On December 9, 1977, a law amended the wage indexation system for 
workers earning more than 8 and 6 million lira: their cost of living increases 
for the period September 1 976 to April 1 978 were to be paid wholly or partly 
in the form of treasury bonds to be redeemed in five years. On January 26, 
1977, the unions agreed to exclude cost of living increases from retirement 
bonuses. 

Further agreements were signed on flexibility that permitted increased 
shift work, greater use of overtime, and greater internal mobility. In February, 
one month after Berlinguer set out the philosophy of austerity, the government 
asked for further union sacrifices. To help employers, some of their social 
security costs were to be paid out of general taxation and this was to be financed 
by an increase in VAT, which was not to affect the cost of living increases. 

This proposal, which had the backing of the International Monetary 
Fund, outraged the shopfloor militants and embarrassed the union leaders. It 
was also a case in which the PCI, obsessed with the quest for international 
legitimacy, found itself caught between its base and the IMF, the symbol of Western 



Enrico Berlinguer and the Historic Compromise 113 

economic orthodoxy. A compromise was reached so that the VAT increases 
were included in the cost of living calculations, but other items such as electricity 
tariffs were not. 

After these measures the union leaders kept trying to moderate the salary 
demands at company and plant levels and met with success. During the years 
from 1976 to 1979 real wages increased by only 2.6 percent annually in 
comparison with 1 1 .4 percent annually for the previous three years. Man-hours 
lost by strikes dropped from 177 million in 1976 to 15 million in 1977 and 71 
million in 1978. Although unemployment went up in 1977 from 1.4 million 
to 1.9 million, it is reasonable to suppose that the unions' choice of defending 
jobs through salary moderation prevented a greater increase. None of this went 
beyond the rearguard action that Social Democrats put up in periods of 
recession, and the parallels with the British Labour Party's social contract are 
obvious. The difference was that the Communists were fighting on two other 
fronts. The political struggle to get into government took a new turn as the 
PCI, mindful of the services it was rendering Italian capitalism and the risks it 
was running with its own constituency, demanded greater power. It succeeded 
in June 1977 in obtaining a formula of "policy agreements" where the party 
secretaries and their advisors met with the government to establish policy. 

The second front was a series of legislative projects designed to introduce 
a degree of governmental control into the economic and social area. Judgments 
on these projects are mostly negative: a typical comment is that they were 
"massive, confused and ineffective."^" Moreover they were frequently voided 
by legislative delays and bureaucratic shortcomings. Fernando Di Giulio, the 
leader of the Communist group in the House, concluded that "the state 
apparatus was quite unable to carry out any serious acts of reform quickly. "^^ 

This was the intentional result of Christian Democrat rule. That the PCI 
should only now discover it seems naive. De Giulio concludes that the Com- 
munists "having been for too many years outside the area of government, were 
not able fully to appreciate the damage that had been done to the state 
structure. "^'^ Their long (self-) exclusion from the workings of the state had 
taken its toll. 

Not that the legislative record of the years 1976 to 1979 is unimpressive. 
An abortion law was passed. A decree on regional government fixed the 
transference of financial resources from the state to local authorities, even if it 
did not give to the regions the power of taxation. A law to limit sharecropping 
and transfer land to the farmers working it was delayed; but this went through 
in 1982. 

Most disappointing was the law on industrial reconversion (Law 675), 
which was the closest the PCI came to giving the state a new role in planning. 



114 THE CRISIS OF THE ITALIAN STATE 

It was designed to allow governments to reorganize by sector, and to avoid being 
stranded with lame ducks and economic fictions. Unsurprisingly, DC ministers 
managed to circumvent Law 675. The state bourgeoisie survived the historic 
compromise unscathed. 

A batch of laws dealing with territorial planning, construction of homes, 
and rents was similarly thwarted. The law that regulated construction was struck 
down by the Constitutional Court and the plan for building homes failed to 
meet its targets. Without new homes rent control was bound to create shortages, 
especially because landlords in big cities preferred to keep their apartments off 
the market. 

PCI proposals for health reform foundered on poor state structures. An 
innovative plan to move mental patients out of institutions and help them live 
in the general community failed, because the systems for help were inadequate 
and the patients were thrown back on overburdened families. The December 
1978 law creating a unified health service run by local bodies called the Unita 
sanitaria locale (USL) was bound to stand or fall by the quality of its adminis- 
trators. Mostly it fell. The USLs became organs of clientelism and helped 
corrupt the PCI.^^ 

The historic compromise was doing precisely what the PCI had accused 
Social Democrats of doing. It had imposed wage restraints, while leaving 
existing social structures intact. The PCI ran into the difficulties with which 
the British Labour Party was familiar. The autumn of 1977 saw a series of 
demonstrations and strikes that the party tried to orchestrate in support of its 
policies of increased investment, but which it feared because they were expres- 
sions of impatience with austerity. The climax was reached when the 
metalworkers marched through Rome on December 2. 

The PCI could not ignore its metalworkers so it pressed ahead. It called 
for a government of National Solidarity and on January 16 Andreotti resigned. 
At the EUR congress on February 13 the union leaders reiterated their support 
for wage restraint in return for investment to create jobs. EUR was a symbolic 
triumph for Lama and for the policy of bargaining, but it marked an end rather 
than a beginning. In 1978 wage restraint was falling apart and along with it the 
historic compromise. High inflation, which came down only as far as 1 2 percent 
at the end of the year, made it difficult for the union leaders to control the 
shopstewards. In October came the strike of nurses and hospital workers. When 
the issue of entry into the European Monetary System was posed in November, 
the PCI feared it would mean further deflation, while the employers, worried 
at losing the weapon of devaluation, wanted greater freedom to lay workers off. 
The common ground between unions and management was shrinking and the 
PCI had exhausted its role as broker. 



Enrico Berlinguer and the Historic Compromise 1 13 

In March the compromise between Communists and Catholics reached 
its peak when the PCI moved into the governmental coalition although not 
into the government. As if to demonstrate that the DC had the upper hand, 
Andreotti submitted a list of ministers who were all Christian Democrats and 
some of whom — Antonio Bisaglia and Carlo Donat Cattin — were fervent 
opponents of collaboration with the PCI. Whether or not the PCI would have 
endorsed such a government became irrelevant when, on March 16, the day of 
the confidence vote, the Red Brigades kidnapped Moro. Now the PCI and the 
occasionally reluctant DC joined together to defend the Italian state. 

It is impossible to fault Berlinguer's decision to throw the PCI into the 
front line against terrorism and to oppose negotiations with the Red Brigades. 
This represented the best aspect of the Gramscian tradition, and in the long run 
it helped save the PCI from the fate that befell so many Communist parties. It 
demonstrated the party's sense of the state. But in the short term it was 
damaging. 

During the months of the kidnapping the PCI suspended all criticism of 
the DC and neglected other issues in order to organize an endless round of 
meetings denouncing the Red Brigades. Here again the fear of illegitimacy was 
lurking: a Communist Party could not run the risk of being soft on left-wing 
terrorists, who also called themselves Communists. The Red Brigades traced 
their actions back to the same partisan struggle that was a source of PCI 
legitimacy.^^ 

However, Turin workers could not understand why the issue of the Moro 
kidnapping should be kept separate from the 30 years of DC misrule that had 
helped create an environment in which terrorism could flourish. ^^ Leonardo 
Sciascia's argument that the PCI was defending the state "as it was, "^^ convinced 
some young people, who helped the Radical Party to its relatively high 3.5 
percent in the 1979 election. The PCI did not succeed in balancing its firmness 
toward the Red Brigades with a concern for individual freedom. Its reaction 
was correct, perhaps all too correct. ^^ 

Sciascia was wrong in prophesying that the Moro affair would strengthen 
the historic compromise. The DC hid behind PCI firmness while not forgetting 
to point out the Red Brigades' links with Communist tradition. There was no 
electoral reward for the Communists. In partial local elections of May 14 they 
slipped from 35.5 percent in 1976 to 26.4 percent, whereas the DC climbed 
from 39 percent to 42.6 percent. In January 1979 Berlinguer called the 
two-and-a-half year experiment to a close. 

During the historic compromise the PCI rendered Italy two major 
services. It helped defeat the terrorist onslaught and it left the economy in better 
shape than it found it. The PCI failed in the task that it undertook, again 



116 THE CRISIS OF THE ITALIAN STATE 

without admitting it, of bringing Social Democracy to Italy. The late 1970s 
saw the crisis of Social Democracy, and it is no coincidence that the PCI 
departed mere months before Thatcher arrived. A specifically Italian criticism 
is that the PCI failed to guide the reformist movement that grew out of the 
events of 1968."^° It remained a Communist Parry, unwilling to change itself 
and hence unable to change the political system or society. The problems of the 
state remained. In 1981 the DC negotiated with the Red Brigades to get Ciro 
Cirillo released. In autumn 1980 Romiti went into batde with the unions and 
crushed them. Berlinguerian austerity gave way to the irresponsibility of steadily 
rising deficits. Systemic clientelism entered its most exuberant phase. 



NO BRIDGE-BUILDERS REQUIRED 

The historic compromise affords an opportunity to study the international 
constraints within which the postwar order operated. The 1975 Congress set 
out the PCI's view of East- West relations. It would remain in NATO because 
leaving would impede the process of detente and divide Italy. Neither reason 
could be expected to gladden the hearts of NATO supporters. The PCI did not 
acknowledge any Soviet threat. It considered "anti-sovietism, whoever is pro- 
posing it, as harmful and as an obstacle to the general struggle against imperial- 
ism and reaction. "^^ 

Of course the matter was not so simple. The PCI had sought an increasing 
independence from the USSR ever since Togliatti's return in 1944. However 
it had never envisaged, and it did not now envisage, a complete break. The Yalta 
memorandum and the invasion of Czechoslovakia were landmarks in the PCI's 
evolution, but its condemnation of the Czech invasion did not imply a 
condemnation of the Soviet system as a whole. So during the 1970s Moscow 
and the Italian Communists engaged in "mutual, if reluctant attempts at 
forbearance.'"^^ 

Nor was this merely Berlinguer's reluctance to break with the Togliattian 
past. At the 1975 Congress Berlinguer stated that, while Eastern Europe's 
political institutions were not those that the PCI envisioned for Italy, its 
economies had survived the early 1970s better because they were planned. He 
added that, whereas the West had lapsed into "corruption and fragmentation," 
Eastern Europe possessed "a moral climate that was superior."'*^ 

Behind these statements lay the uncertainty that pervaded other aspects of 
PCI political culture. Berlinguer stated that the PCI had "solid international 
traditions to which we intend to remain faithfiil.'"^'^ But what were they? A 



Enrico Berlinguer and the Historic Compromise 117 

Rinascita article tried unsuccessfully to spell them out: the Czech invasion must 
not be forgotten but the USSR is now changing and moving toward detente; the 
PCI looks toward the non-Communist Western European Left, but it is critical 
of the Italian Socialists. Anyway, it must not be Eurocentric, because there are 
also the liberation movements in the Third World. Two themes emerge from 
this confusion: the trust the party placed in detente and the growing attention for 
the non-Communist world. Each reflected the PCI's desire to bridge the gap 
between East and West, without, however, abandoning the East. 

As it drew closer to government the PCI tilted ever further westward. In 
a much publicized interview of June 15, 1976, Berlinguer stated that NATO 
was a shield that protected the Historic Compromise from ending up like the 
Prague Spring — "I feel safer on this side.'"*^ Surely this was anti-Sovietism? At 
the Soviet Communist Party's XXV Congress of February 1976 Berlinguer 
affirmed that the Italian brand of Socialism was based on an expansion of 
previous democratic conquests — no longer dismissed as formal or bourgeois — 
and would take place in a pluralist system. In November 1977 he went further 
when, at the sixtieth anniversary of the Russian Revolution, he declared that 
democracy was a "historically universal" value, thus undermining the validity 
of the Soviet brand of Socialism. The Italian brand was no longer separate and 
equal; it was superior."*^ 

To what extent Berlinguer had the party behind him is hard to assess. It 
has been estimated that the base was generally anti-U.S. and anti-NATO and 
that it was divided about the USSR, with as many as 25 to 30 percent of the 
members opposing Berlinguer's clear break with Moscow in December 1981.'^^ 
This would explain why Berlinguer, obliged between 1976 and 1979 to impose 
domestic policies that displeased the base, took care periodically to praise the 
Soviet Union. His speech defending the Russian Revolution, delivered appro- 
priately at the Festa de 1' Unita in September 1978, was one example.'^' 

The PCI made increasingly desperate attempts to resurrect Lenin. Admit- 
ting that Russian Marxism was "a closed body of doctrine," Berlinguer argued 
that Lenin must be reread critically.^° But what did this mean? Well, the Lenin 
of left-wing infantilism could be invoked against the 1977 Movement, or the 
Lenin of Brest-Litovsk could justify compromises with one's opponents. In 
return the Lenin of the one-party state could be forgotten. 

How did the Soviets perceive the Italian comrades? They disliked PCI 
heresies but admired PCI success. The PCI was becoming less of a pro-Moscow, 
opposition party, but it might become an anti-Washington government party. 
Alternatively it has been suggested that the Red Brigades received help from 
Eastern Europe because their terrorism embarrassed the PCI.^' In retrospect it 
is clear that the PCI was engaged in a long slow movement out of the Soviet 



118 THE CRISIS OF THE ITALIAN STATE 

orbit. As long as detente lasted forbearance could continue. The invasion of 
Afghanistan and the imposition of military rule in Poland would lead to a clear 
break. But in the late 1970s the PCI wanted to remain a Communist party and 
thus wanted the Soviet connection. 

It also wanted to be tolerated by the United States. During the postwar 
period the United States could not control who won in Italy but it could control 
who lost. The PCI needed to remove the American veto on its entry into 
government. As already stated, Kissinger and Berlinguer were in partial agreement 
about the economic problems of the 1970s. They stemmed from a crisis of 
capitalism that might create a shift to the Left throughout Europe. Kissinger 
envisaged chaos in Italy, the Communists forcing their way into power, offers of 
Soviet aid, and an end to Italian democracy. In turn this would have repercussions 
in other countries like France, where conventional wisdom held that the Com- 
munists would prove the dominant partner in the Union of the Left. The EC 
would be weakened and the United States would retreat into isolation. 

Moreover Kissinger was under pressure in the United States because his 
policy of detente seemed to be working in favor of the Soviets. The SALT 
agreement supposedly gave them a military advantage, while the Helsinki 
accords provided them with political legitimacy. Weakened at home by Waterg- 
ate and abroad by the flight from Saigon, the United States no longer appeared 
the dominant world power. This helped trigger the current of U.S. neoconserva- 
tism that viewed Kissinger as a traitor. 

In particular the New Right disliked Kissinger's acceptance of the fact of 
Soviet power and of the division of the world into blocs. Small wonder that it 
viewed the rising Communist influence in Western Europe as a proof that it 
was right. But even without this pressure Kissinger would have been intransigent 
toward Eurocommunism, because his view of the world as two blocs pre- 
supposed that the Soviets should have no influence in the Western bloc. 

To Kissinger the PCI's professions of pluralism were a fiction. Commu- 
nists might make a pretense of democracy or they might be sincerely democratic, 
but once they attained power, they would follow the logic of Communism in 
terminating pluralism and bidding for absolute control. ^^ This view of the PCI 
seems doubly wrong. First, because the PCI's worldview was not a mask for 
traditional Communism, but rather the form that Communism had assumed 
in the Italy of the 1970s. Second, Kissinger overestimated the PCI's strength, 
refusing to admit that a party with 34 percent of the vote in a country teaming 
with NATO soldiers would simply be unable to take over the government. The 
probable reason for this error is that, to Kissinger, the PCI was a pawn in the 
larger chess game he was conducting with the Soviets and the American 
neoconservatives. Any victory for the PCI could be used against him. 



Enrico Berlinguer and the Historic Compromise 119 

After the June 1976 elections the United States and its allies moved 
immediately. At a Group of Seven meeting in Puerto Rico it was decided that 
if Communists entered the government, Italy would be isolated and there would 
be no more international loans. The Social Democrats, Helmut Schmidt and 
Jim Callaghan, supported this stand. ^'* Indeed Schmidt took the decision to 
make it public. 

The arrival of the Carter administration in 1976 seemed to announce a 
change of policy. During the campaign Jimmy Carter had attacked Gerald Ford 
for excessive interference in the affairs of allies, while Zbigniew Brzezinski 
substituted the notion of the polycentric world for Kissinger's two blocs. This 
might mean that the United States would cease to make its views felt in Italy, 
or that it would consider the economic issues and accept a Communist presence 
in the government in return for wage restraint. 

Either of these developments would have represented an enormous 
change in U.S. foreign poHcy and neither took place. Although there were 
differences of opinion within the administration — Cyrus Vance was relatively 
soft and Brzezinski hard — the Carter people endorsed the Kissinger line. 
Carter's foreign policy, while erratic, was in no sense left-wing and his Amer- 
icanismo — his belief in America's mission to bring democracy to the world — 
lent itself to anti-Communism.^^ 

In 1977-78 the parallels with the postwar period were clear. The United 
States used and was used by the DC. Each time the United States wanted a 
reformist government and the PCI in opposition, it obtained the second but 
not the first. The State Department pressed Andreotti to introduce reforms but, 
predictably, although he did precisely the opposite, he was applauded as a new 
De Gasperi when he visited Washington in July 1977, because he was keeping 
the PCI outside the government. ^^ Christian Democrats encouraged Washing- 
ton to make its views known and then used those views as a reason for not 
admitting PCI ministers. Ambassador Richard Gardner complied by reiterating 
traditional U.S. policy: "we do not want Communist Parties to be influential 
or dominating in Western European governments."^^ 

In his memoirs Brzezinski claims that U.S. efforts were a "distinct help" 
in ending the historic compromise and that this was "one of the less-known 
success stories of the Carter years. "^^ The only criticism one might make of this 
statement is that the United States slew a dragon that it had itself invented. In 
no sense can the Italian case serve as an example of how the United States hurled 
back the Brezhnev onslaught of the post-detente years. 

The PCI used such influence as it possessed to project a moderate image. 
Its spokesmen sped across the Atlantic bearing brand new visas and promising 
to leave power if defeated in an election. But anti-Communism was a necessary 



120 THE CRISIS OF THE ITALIAN STATE 

part of American political culture and the United States had invented its PCI 
which was quite separate from Beriinguer's. The only criticism to be made of 
the PCI is that if it had discarded its obsolete cultural baggage it might have 
made Kissinger and Brzezinski work harder. 

The veto remained. The PCI wanted to build bridges between East and 
West but world time was working against the historic compromise. Detente 
was giving way to the last phase of the Cold War. 

U.S. opposition was probably less important in the failure of the Historic 
Compromise than the DC opposition or the PCI's own weaknesses. The former 
recovered its old role as a bulwark against the Eastern hordes, while the latter 
paid the price for its determination to remain a Communist party without really 
knowing why. During the years 1976 to 1979 the PCI almost lost "any sense 
of where it stood in society."^' 

Its decline dates from 1979. It never again came close to power and by 1987 
its share of the vote had fallen to 26.6 percent. The Christian Democrats did not 
benefit in the long run from their victory. As Communist influence diminished, 
they declined too. The antagonists had fought each other to a standstill and they 
could not resume their tacit alliance afterward. The historic compromise is 
significant because the attempt to reform the political system left the system 
bankrupt. In turn this accounts for the fascination of Beriinguer's last years. 



BERLINGUER FROM 1979 TO 
1984: THE TWILIGHT OF THE PCI 

Beriinguer's position as secretary was not seriously threatened by the failure of 
the historic compromise. Indeed he was allowed to make major decisions, such 
as the December 1981 break with the Soviet Union, in isolation. This stand 
and the choice of the alternative government in November 1980 helped 
Occhetto transform the PCI into the PDS between 1989 and 1991. 

The party's verdict on Beriinguer's last years is unfavorable. ""^ The Right, 
which looked to Giorgio Napolitano, felt that Berlinguer, reacting against the 
historic compromise, was too extreme. Critics cited his speech at the Mirafiori 
gates in September 1980, which offered PCI support to the Fiat workers if they 
and their unions decided to occupy the factory. BerHnguer was equally intran- 
sigent in opposing the modification of the wage indexation system in 1984, a 
stand that led to the PCI's defeat in the referendum of 1985. The same critics 
disliked the theme of Communist "difference," which isolated the party. In an 
Italy where terrorism was being beaten back, where a recovery from the 



Enrico Berlinguer and the Historic Compromise 121 

economic traumas of the 1970s was underway, and where the working class was 
decHning in numbers and in power, Berlinguer stranded the party in the sterile 
purity of opposition, while Craxi's PSI was growing in importance.^' 

One reason for discussing Berlinguer's last years is precisely his aware- 
ness that Communism in Italy, though masked by victories like the over- 
throw of the Cossiga government in 1980 and the 29.9 percent vote won in 
the 1983 elections, was approaching a crisis. Berlinguer watched the rise of 
neoliberalism, in which he saw an exasperation of the individualism he had 
denounced. He felt that Craxi was turning the PSI into the bulwark of a new 
Right. Eastern Europe provided no solutions. So Berlinguer made a desperate 
attempt to redefine Italian Communism. He emphasized the old distinction 
between Social Democrats who accepted capitalism and Communists who 
fought to transcend it. Now, however, he transformed this difference into a 
moral stance: a refusal of the values of consumer capitalism. This reaffirma- 
tion of Communism as self-sacrifice must be seen as a bid to revitalize a dying 
creed by invoking the energies of its youth. The ideal of a Gramsci who died 
in prison for his beliefs haunted Berlinguer. It is all too easy to understand 
how absurd it seemed to Emilia-Romagna Communists who had made their 
party strong by creating wealth and a stable government. Berlinguer re- 
mained "faithful to a teleological project which, although it had lost its 
dynamism, lived on."^^ 

Yet while draped in cultural pessimism and unable to find a coherent 
political outlet, the discourse of Communist difference pointed to Italy's real 
problems: the occupation of the state by the parties, systemic clientelism, and 
the growing alienation of the citizens. Until 1979 Berlinguer had believed in 
the Toghatti-De Gasperi vision of the Republic, where the major parties — 
especially the DC and the PCI — would spread democracy by involving the 
masses in government. Belatedly realizing that the postwar settlement had 
turned into systemic clientelism, Berlinguer abandoned this vision. 

His concept of difference was yet another service to his party because 
Occhetto could invoke it during the Clean Hands investigation. Its weakness 
lay in its sparse political content. Berlinguer knew that it involved an alternative 
government but he did not envision alternation of parties in power. He did not 
give up the belief in a "good" DC, although he did know that the existing DC 
could not help to reform the state. He failed to form an alliance with the PSI 
(although this probably would have been impossible anyhow). He did not take 
up the issue of electoral reform. He placed too much hope in new forms of 
protest like the women's movement. 

Yet Berlinguer's last intuitions were correct. He realized — unhappily — 
that he was living in the twilight of the PCI and he knew that the postwar order 



122 THE CRISIS OF THE ITALIAN STATE 

was breaking down. In 1980 he stated that "today the moral question has 
become the most important national issue. "''^ In his attacks on the state 
bourgeoisie, there was a sense of what the Italian state might and should be. 
Even in the 1970s he had tried to ensure that the men nominated by the PCI 
as heads of banks were chosen for their ability rather than for their party 
affiliation.*^ Spurred by the revelation of the P2 lodge and the Calvi affair in 
1981, Berlinguer uttered a cry of protest: "the parties have occupied . . . the 
structures of local government, the welfare agencies, the banks, the nationalized 
industries, cultural institutions and hospitals."*'^ His words almost foreshadow 
the outcry of 1992. 



7 

From Craxi the Exacter 
to Bossi the Spoilsport 



If the DC received its most severe punishment from the electorate in 1983, 
and if Berlinguer's sense of Communist difference was the PCI's last intel- 
lectual upsurge, then essentially the Republic had run its course by 1979. One 
is left with the problems of explaining why the crisis did not come until the 
elections of 1992 and how and why it came then. One obvious answer lies in 
world time: Italy could not change until the Cold War ended even though the 
East-West split only conditioned but did not determine the Italian situation. 

Another reason lies in the domestic political developments. The PSI first 
gave the postwar settlement a reprieve by promising to modernize Italy and then 
undermined the clientelistic order by its greed. Into the opening — literally into 
Craxi's Milan — stepped the Lega, which not only took away the DCs Northern 
votes, threatening its role as the linchpin of the postwar order, but proposed to 
solve the problem of the Italian state by terminating it. 

These political developments are inseparable from economic and social 
trends: the Lega gave voice to the small companies of thejv4ilan hinterland, 
the kind of companies that had dragged Italy through the 1970s, but which 
were underrepresented politically.' This chapter is divided into three parts, 
the first dealing with the PSI, the second with the Lega, and the third with 
the years before 1992. Running through each section is an analysis of 
economic and social processes that the political system finally proved unable 
to manage. 



124 THE CRISIS OF THE ITALIAN STATE 

BETTING CRAXI: THE SYSTEM DEVOURS ITSELF 

In the 1994 elections the PSI simply disappeared. Ottaviano Del Turco, its 
recently installed leader, won a seat in Emilia-Romagna, but his party gained a 
mere 2.2 percent of the vote and so failed to reach the 4 percent minimum, 
above which a party was eligible for seats in the proportional representation 
segment. A few ex-leaders ran in other formations — Giorgio Ruffolo with 
Alleanza democratica (AD) — while ex-Prime Minister Giuliano Amato did not 
run at all. In Bettino Craxi's Lombardy the PSI won only 1.5 percent. Deprived 
of their parliamentary immunity, ex-leaders like Claudio Martelli had their 
passports taken away and are awaiting trial. Craxi has not waited, but has fled 
to his country house in Tunisia. The Clean Hands investigation decimated the 
Socialists, who had accumulated power during the last years of the old regime 
and have now gone down with it. 

In 1972, roughly a decade after the Center-Left governments began, the 
PSI polled at 9.6 percent. In 1976, despite the surge of the Left, it remained at 
9.6 percent. The electorate had not forgiven it for its failure to implement 
reforms and for its emulation of DC clientelism. In a generational coup Craxi 
became party secretary with the support of Claudio Signorile. The two belonged 
to different currents in the PSI, Craxi stressing autonomy and Signorile 
cooperation with the PCI. They agreed that the PSI had been punished for its 
subordination to the DC, but, whereas Signorile saw the solution in improved 
relations with the Communists, Craxi believed that greater self-assertion would 
bring the party new support. The two views were compatible as long as the PCI 
sought a privileged relationship with the DC, but after the end of the historic 
compromise Craxi and Signorile clashed and Craxi won out. 

Much attention has been paid to Craxi's personality and style of leader- 
ship, but one wonders whether he deserves it.^ Blustering and bullying, he ran 
the PSI from 1980 to 1992 like a minor Stalin, while during his four years as 
Prime Minister he made ostentatiously bold decisions, some of which disinte- 
grate when examined closely. It is not incorrect to argue that this would-be 
strongman was the first postwar politician to readopt a style reminiscent of 
Crispi and even of Mussolini. However, Craxi reflected the decadence of an 
aging regime rather than the birth of a new authoritarianism. 

His strategy rested on the perpetuation of Communist illegitimacy. 
Anti-Communism came naturally to Craxi, who remembered from his youth 
Socialist subordination to the Communists between 1948 and 1956. Moreover 
the PCI furnished him with a pretext by snubbing the PSI during the historic 
compromise.^ Communist illegitimacy provided the PSI with its goal of creat- 
ing an autonomous left-wing party of government, while in the meantime it 



From Craxi the Exacter to Bossi the Spoilsport 125 

justified coalitions with the DC. The mistake of the Center-Left would be 
corrected by tougher bargaining with the Christian Democrats. However the 
twin pillars of the postwar settlement would remain in place for the foreseeable 
future, even if they were less massive. Craxi's gamble was that PCI and DC 
would emerge weakened from the historic compromise — which they did — and 
that space would open up for the more modern and pragmatic party that he 
said he would create but did not. 

Sociological trends were indeed running for the PSI and against the PCI. 
A glance at the Communist Party in the Vcneto reveals that in 1982 47.7 
percent of its members were workers, whereas in 1988 the number had 
dropped to 43.3 percent. Conversely the number of pensioners had increased 
by nearly the same amount — 16.7 percent to 20.6 percent. The working class 
was growing older and with it the PCI. However the postwar barriers were 
breaking down: of the delegates to the Federation congresses of 1990 22 
percent had belonged to Catholic organizations. Moreover 30 percent had 
been active in parish activities in their childhood and 40 percent had mothers 
who were practicing Catholics.^ Although these figures may exaggerate the 
degree of openness extended by the mass of Catholics to the PCI, they are a 
sign that political loyalties could change more easily than in the immediate 
postwar years. 

One reason was that class divisions were less sharp. In 1960 the average 
salary was three times the average wage. In 1970 the average salary was twice as 
much as the average wage and by 1983 it was only 1 .3 times as much. Like other 
European societies Italy was turning into a constellation of social groups, of 
which an underclass — 1 1 percent of the working population — was clearly left 
out, while others were clustered together. The general prosperity turned workers 
into consumers whose tastes were similar to those of other consumers. The 
changing roles of women made their political attitudes more diverse. 

It became a cliche to contrast the activism of the early 1970s with the 
concentration on private life in the 1980s. Amoral familism was supposedly 
back. 5 But the 1970s had not really marked a break with the attempt by the 
family to improve its economic status, while the 1980s demonstrated no wish 
to go back on social reforms like the right to divorce. The major change was in 
the size and nature of the working class and of the urban middle class. 
Working-class growth had peaked in 1971 when it represented 47.1 percent of 
the working population, 6 percent more than in 1951. But by 1983 it had 
decreased to 42.7 percent, which was another reason why the PCI's difficulties 
could only increase. Meanwhile the urban middle class, which had also grown 
from 1951 to 1971—26.5 percent to 38.5 percent— went on growing and in 
1983 reached 46.4 percent. An intriguing statistic is that the category of 



126 THE CRISIS OF THE ITALIAN STATE 

"artisans" declined from 6 percent in 1951 to 5.3 percent in 1971, which was 
predictable, but then rose to 5.8 percent in 1981. Since this category includes 
owners of small businesses, it is probable that they grew by more than 0.5 
percent, while conventional artisans continued to decline. Certainly the number 
of self-employed increased from 24 percent in 1980 to 29 percent in 1988.'' 

As in other European countries, industry employed a smaller percentage 
of the labor force. In 1971 the figure was 42 percent, up 7 percent from 1951, 
but in 1983 it was back at 35 percent. Unlike other European countries, 40.3 
percent of industrial workers were in plants with fewer than ten employees; the 
corresponding figures for France and Germany were 22.3 percent and 18.2 
percent. Agriculture had long lost its army, declining from 43 percent in 1951 
to 18 percent in 1971 and 13 percent in 1981. But the service sector was 
growing from 15 percent in 1951 to 30 percent in 1971 and 37 percent in 1983. 
The percentage of government employees rose with it from 7 percent to 10 
percent and then to 15 percent. 

If the final set of figures hints at the lasting problem of the state 
bureaucracy, the other statistics show the transition to a society based less on 
the division between capital and labor. Moreover at precisely the moment when 
the march of the 40,000 who protested against the 1980 strike appeared to mark 
the split between the white-collar and blue-collar workers at Fiat, that distinc- 
tion was being eroded. Continuing a process that had been noted during 
Valletta's reign, the upper levels of the industrial workers were turning into 
technicians. 

The development was not uniform, for in the early 1 980s the robotization 
of the workplace also de-skilled Fiat workers.^ But, as the Fordist working class 
broke up, it also lost its power to attract other social groups. To oversimplify, 
the common sense of society was represented by a better-educated group, less 
influenced by the PCI or by the Church, and less unionized, more flexible in 
its political behavior, without any vision of an order outside Western capitalism, 
but displeased with DC rule. Small business, with its particular culture of 
self-reliance and distrust of the state on which it nonetheless makes demands, 
was especially important. 

The weakened working class faced employers who had reacquired their 
self-confidence after the defeat suffered by the PCI. Cesare Romiti's bold stand, 
which rather frightened the coalition government, reshaped not just Fiat but 
all Fiat suppliers. The worker militancy of the 1970s disappeared and manage- 
ment regained control of the shopfloor. Eventually this would lead — in the 
1992 and 1993 wage agreements — to a tripartite consultation process, which 
marked a reconciliation between the working class and the state, albeit on terms 
that the CGIL of the 1950s or the 1970s would have judged unacceptable. 



From Craxi the Exacter to Bossi the Spoilsport 127 

The old difference between North and South was blurred but unchanged 
by the development of small industry in the Center. In the 1970s private-sector 
white-collar workers were 15.9 percent of the working population in the 
northwest and 12.6 percent in the Center and northeast, but they were only 
8.4 percent in the South. The figures for public-sector white-collar workers 
were 7 percent, 8.1 percent, and 13 percent.' Whoever ruled in the South, 
whether Christian Democrats, Socialists or, as today, the National Alliance, was 
doomed to support a large role for the state. 

The postwar problem of finding a policy blend that suited North and 
South remained. The change was that a party that challenged the DC should 
be Center-Left and interclass. Was Italo Calvino's ideal liberal party about to 
be called into existence by Craxi? 

The answer was no, but we must briefly consider the first three periods 
of his leadership, leaving the fourth for later. The first, from 1976 to 1979, saw 
the PSI wait, terrorized at the prospect of its demise, until the PCI was 
weakened. Then it struck at Berlinguer's strategy. During the Moro kidnapping 
the PSI called for concessions to the Red Brigades, played on the emotions of 
the DC rank and file, and tried to split the DC and the PCI, which had refused 
to negotiate. The contrast with Berlinguer's sense of the state was glaring. Next 
Craxi, switching tactics, tried to delegitimize the PCI by publishing an essay 
where he set the PSI in the tradition of Proudhon and denounced the PCI's 
Marxist heritage. '° This was one of many attacks on the Communists' collective 
memory. Others would include onslaughts on Gramsci or, alternatively, on 
Togliatti's neglect of the imprisoned Gramsci. Intellectually crude, these broad- 
sides exposed the excessively subtle way that the PCI reconstructed its past. They 
were accompanied by a celebration of the PSI's ties with other western European 
Socialists, although in reality the party had little in common with either the 
Labour Party or the French Socialists.' ' 

In the 1979 elections the PSI gained some votes from the PCI in the South. 
This began a long march in the South that involved clientelism and ties with 
organized crime. Overall the PSI increased its vote by only 0.2 percent. Craxi's 
conclusion was that the party must return to government, which would isolate 
the Communists in opposition and allow the Socialists to undertake reform. After 
the DC congress of February 1980, he took advantage of the victory of the groups 
that opposed cooperation with the PCI and forced his way into the government. 
To underline the difference with the Center-Left, he insisted on obtaining nine 
ministries, including Finance, Public Sector, and Defense. 

To appeal to the growing urban middle class, the PSI took a libertarian 
stand on social issues such as abortion. It talked vaguely of electoral reform, but 
feared a British or French voting system that would greatly reduce the number 



128 THE CRISIS OF THE ITALIAN STATE 

of seats it held in parliament. Instead it called for the direct election of the 
president, which suited Craxi's image but had no chance of being implemented. 
It succeeded, through individuals like Giorgio Ruffolo, in attracting intellectu- 
als who wanted to reform Italy, but it gave them scant power in the party. The 
PSI was caught in a vicious circle of its own making. By governing with the 
DC, it dissipated its reformist energies. The only way it could assert itself was 
in the war for spoils. As the voters perceived this, they refused to reward the PSI 
with the increased support it needed to bring pressure on the DC. 

The only solution Craxi could devise was to win the war for spoils. The 
PSI wrestled for control of ENI, a larger chunk of state television, the BNL, 
and local government agencies. Inevitably scandals resulted. The ENI-Petromin 
bribery hit the press in September 1979, although Craxi manipulated it into a 
weapon to defeat Signorile. In May 1981 the published list of P2 members 
included such well-known Socialists as Enrico Manca and the party chief in 
Liguria, Alberto Teardo. In July the jailed Roberto Calvi claimed that he had 
lavished money on the PSI, which prompted Craxi, who presumably feared 
further revelations, to attack the magistrates for imprisoning Calvi. This sparked 
the long war between the PSI and the magistrates, which contributed to the 
Clean Hands investigation. The public grew accustomed to seeing Socialists 
carted off to prison. Teardo and his associates were jailed in 1983, while 
Giuseppe la Ganga somehow avoided a similar fate in Turin. '^ 

Unsurprisingly the PSI vote went up by only 1 .6 percent in 1 983, despite 
the sharp fall of the DC and the stagnation of the PCI. Craxi was right in 
thinking that many voters wanted change, but the PSI offered only the trappings 
of modernity through slick, expensive party congresses designed for TV. Not 
without reason Berlusconi was drawn to the Socialists. Craxi's quest for power 
was rewarded when he took advantage of the DCs defeat to become Prime 
Minister. 

To understand his economic policy we must review the events of previous 
years. The ending of the temporary Austrian solution, provided by the historic 
compromise, and the second increase in oil prices, which raised the cost of oil 
imports by 70 percent in 1980 and by 49 percent in 1981, left Italy with a $20 
billion trade deficit in 1980 and with an inflation rate that was around 20 
percent.'^ However by 1983 economic improvement was in full swing, led by 
the restructuring and labor-shedding of big industry and by the export flair of 
small business.'^ In 1983 growth ran at 2.9 percent and it continued at this 
level for the next two years. By including the black or untaxed economy Craxi 
could proudly announce in 1987 that Italy had overtaken Britain in per capita 
GDP. He was also fortunate that he was in power when oil prices and the dollar 
dropped in 1986. 



From Craxi the Exact er to Bossi the Spoilsport 129 

This was a boon to the anti-inflation struggle, in which Craxi played his 
part. In 1984 he cut back the mechanization of wage-indexation to meet the 
government's target of reducing inflation to 10 percent for the year. He did so 
with a decree that enhanced his image as a leader willing to take bold decisions. 
Politically this was genuinely bold, and Berlinguer, who was in his mood of 
hard-line opposition, helped Craxi by launching the Communist majority of 
the CGIL into a crusade of opposition. The battle went on long after 
Berlinguer's death and culminated in a 1985 referendum, which Craxi won by 
54 percent to 46 percent. 

This victory established Craxi as one of the two or three dominant figures 
in Italian politics. His role in pressing for the Single Europe Act at the Milan 
summit of 1 985, and the way he refused to hand over the Achille Lauro terrorists 
to the Americans, helped make him indispensable to the formation of a 
government. If he did not lead it, he had at least to bless it. De Mita's 
government of 1988-89 went unblessed and did not last. The wage indexation 
victory was won despite the PCI, and thus contributed to the Communists' 
decline to 26.6 percent in the 1987 elections. 

The economic effect of the decree was slight, if only because the govern- 
ment offered concessions such as holding down prices it controlled. Inflation 
fell to 10.6 percent in 1984 and to below 10 percent in 1985. Probably the 
international factors, the Bank of Italy's tight money policy, and the victories 
won by management over labor played as much of a role as the government. 
Moreover Italian inflation was still running 4 percent above the EC average, 
and Craxi was unable to gain a lasting disinflation, as Mitterrand did in France. 

On another, even more vital issue Craxi made no impact. The government 
debt had grown rapidly, spurred by spending on social programs — such as 
health care — in the 1970s. By 1981 it stood at 55 percent of GDP and Craxi 
could do nothing to halt it. When he left power in 1987 it had reached 92 
percent of GDP, and was fueled by interest payments.'^ In 1981 the Bank of 
Italy ceased financing the deficit because of its obligation to maintain the value 
of the lira. The government turned to massive issues of Buoni Ordinari del 
Tesoro (BOT), which drove interest rates up and created a powerful pressure 
group that resisted attempts to tax the bonds, thus increasing the debt. 

So the rosy glow of prosperity that accompanied the later years of Craxi's 
premiership and that suited the Socialists' image as modernizers was short-lived. 
It faded as soon as the world economy turned sour in 1990. Italy's old strengths 
and weaknesses remained. Her entrepreneurs were dynamic — Berlusconi's TV 
empire was thriving and in 1986 he acquired AC Milan. However, industry 
remained weak in the areas of high technology. The big companies like Fiat 
expanded their financial operations, which made money and helped them avoid 



130 THE CRISIS OF THE ITALIAN STATE 

high hiterest rates. But small firms were damaged by interest rates, and the 
attempt to enlarge the stock market caused only brief worries for Cuccia. The 
state bourgeoisie did well under Craxi, as the example of Berlusconi 
demonstrates. The economic factors that contributed to the 1 992 upheaval were 
left untouched. 

To say this is not to condemn Craxi's prime ministership. The 1984 
Visentini law, which forced shopkeepers and artisans to pay more — although 
not all — of their share of taxes, was another achievement. In substance although 
not in style, the PSI governed much like the DC. It was no coincidence that 
Craxi formed a wary alliance with his Foreign Minister, Andreotti. In the 1987 
elections the electorate rewarded the PSI, increasing its share of the vote to 14.3 
percent. This convinced Craxi that his methods were correct, but in fact his 
attempt to dominate the political system was undermining it, since unknow- 
ingly he had helped call its enemy into being. 



THE BARBARIANS MARCH ON ROME 

In the 1994 elections the Legawon 8.4 percent of the vote, which with the help 
of the mosdy winner-take-all system turned into 122 seats in the House. 
Umberto Bossi's triumph was overshadowed by two problems. The first was 
that he had been obliged to form an alliance with Forza Italia, which had 
threatened to take over his policies and his supporters. The free market, the 
family business, the contempt for the old regime were Berlusconi's themes, and 
his ability to frame them in a language that was populist but governmental rather 
than populist and protesting, appealed to the Lega's more sophisticated sup- 
porters. Bossi's share of the vote went down from 9.2 percent in 1992 and it 
dropped by 2 percent in Milan to 16 percent. The Lega ran ahead of FI in its 
strongholds of Varese, Brescia, and Bergamo, but it was overtaken in Como and 
Pavia and it ran behind Berlusconi's army in the Veneto. Around 19 percent of 
the Lega's 1992 voters deserted to Forza Italia."' 

The second and overlapping difficulty was that the Lega would have to 
become a party of government, whereas it was designed for opposition. It had 
been all too successful: it had helped bring down the old regime and prepare 
the way for the new one, but it risked losing the political space it had won. 

A brief glance at Lega history reveals its destructive power. It began as a 
regionalist movement in 1984, modeled in part on the Unione Valdotaine. 
There was a small upsurge of regionalism and in the 1983 elections the Liga 
Veneta gained over 5 percent of the vote. While seeking the special status 



From Craxi the Exacter to Bossi the Spoilsport 131 

awarded to the Val d'Aosta, Bossi tried to present Lombardy as a cultural unit. 
The son of a poor family of farmers, he had seen his rural region transformed 
by industry and he fought for its traditions, especially its dialect. However he 
gained scant support. Lombardy was not Sardinia, voters did not care about the 
dialect, and in any case there was no overt mood of protest. Bossi's career is 
counterpoint to Craxi's, and in the mid-1980s Craxi, who was Prime Minister, 
was successfully leading the attack on wage indexation. All that remained of 
Bossi's first phase was the sense of a strong "them" and a rebellious "us." 

The way in which the "us" was redefined is indicated by the Lega's 
language. Without money to buy TV time, Bossi stuck up posters and scribbled 
on walls. While spray-painting graffiti, he got into fights. All this confirmed his 
view of language as transgression.''' However, he abandoned the dialect for a 
language characterized by its crudeness. Allusions to the virility of Lega sup- 
porters and to the impotence or sexual preference of their opponents, slogans 
like "Roman robbers," attacks on the physical appearance of other politicians, 

and the deformation of their names — Berlusconi becomes Berluskaiser 

established the Lega as the incarnation of the swaggering males of the small 
bars around Milan. '^ Italy had produced yet another brand of populism. 

The "us" took economic and social shape. "We" were the working class, 
the self-employed, and the small businessmen of Lombardy, the unappreciated 
wealth creators. Culture was replaced by common interests: the industrious 
North as opposed to immigrants with other customs or to idle Southerners. 
The real "them" became the Rome government, which redistributed money to 
the South and placed bureaucratic obstacles in the path of northern wealth 
creation. 

One manifestation of the economic component in the Lega's regionalism 
came in 1994 with its attempt to prevent Cariplo from forming ties with its 
counterpart in Puglia.'^ An example of the Lega's economic populism is its 
hostility to the Cuccia-Agnelli establishment. The Lega backed privatization, 
but it objected strongly to the way that Credito Italian© and Comit fell into 
Cuccia's grasp, even if it did ironically strengthen Cuccia by helping destroy 
the DC and its dubious financiers. In general, small businesses resent having to 
borrow money at interest rates that may be almost double the prime rate. The 
Lega's link with them was reflected in the statement of Vito Gnutti, the new 
Minister of Industry, that "their interests would be a central preoccupation" of 
the Berlusconi government. ^"^ 

With its reshaped identity the Lega grew. In the general elections of 1987 
it won 3 percent in Lombardy. By the European elections of 1989, it had risen 
to 8 percent and in the local elections of 1990 it leapt to 19 percent. The size 
of the second increase indicates that a protest, which had been latent, had 



132 THE CRISIS OF THE ITALIAN STATE 

suddenly taken form. Geographically the protest was strongest in the small- and 
medium-sized towns: the Lega won only 12.9 percent in Milan but it reached 
20.8 percent in Varese and 20.1 percent in the DC stronghold of Brescia. In 
the province of Milan it gained 2.3 percent more than in the city itself, while 
in Como the difference was greater — 22.9 percent compared with 1 8.2 percent. 
The Lega even invaded red Emilia, reaching 6.7 percent in Parma, while the 
Liga Veneta achieved scores that offered hope to the future Lega Nord — 7.2 
percent in Verona and 5.9 percent in Rumor's old stronghold of Vicenza. 

The social and economic factors lay in the mixture of achievement and 
malaise present in a predominantly DC electorate. As early as 1982 the astute 
Bisaglia explained — but did not correct — the phenomenon. The DC state had 
concentrated, he maintained, on the South and on the big northern cities, but 
it was perceived in Varese or Brescia as a taxing, inefficient bureaucracy.^' The 
inhabitants of the Lombardy periphery were sophisticated enough to grasp the 
way in which the government worked, but they were unable to turn it to their 
advantage. The expansion of the state bourgeoisie damaged them, while the 
Austrian solution promised by the historic compromise was irrelevant to them. 
Prosperous but only recently so, they tolerated the regime until the situation 
changed. By 1990 the economy was starting to decline. 

The political situation had changed too. Craxi was both out of power and 
very much a part of government by clientelism. The DC, far from renewing 
itself, offered in Andreotti and Forlani its most devious and its weariest leaders. 
The transformation of the PCI into the PDS was so painful as to provoke 
desertions rather than converts. 

The long-delayed crisis of politics had arrived. ^^ Some elements were 
common to all western European countries: economic specialization and de- 
centralization broke up the red subculture based on the Fordist working class, 
while Pius XII's nightmare came true as prosperity undermined religion and 
the white subculture. The population was more mobile: 33 percent of Italians 
now live in places where they were not born. The percentage of the electorate 
voting for the two major parties declined from more than 66 percent in 1975 
to around 45 percent in 1990. Both the leading parties of the governmental 
coalition suffered in the 1992 elections: the DC dropped 4.4 percent to below 
30 percent and the PSI sUpped 0.7 percent. In Italy as in other countries 
skepticism about government grew: whereas in 1967 only 33 percent of people 
surveyed felt that the government was not honest, 85 percent held this view in 
1980. But the level of disillusionment in Italy was far higher than elsewhere: In 
a 1989 comparative survey 29 percent of people felt that the government was 
competent and 49 percent felt it was not. The equivalent figures for West 
Germany were 51 percent and 16 percent.'^^ 



From Craxi the Exacter to Bossi the Spoilsport 133 

The expressions of the crisis of poHtics were various and contradictory. 
One form was the demand for a kind of militancy, which took more account 
of the individual's needs. The Verdi, the Parti to radicale, and the women's 
movement sought to provide new forms of participation. Another form was the 
decreasing significance of the Left- Right spht; this was a complex phenomenon 
because the memory of Fascism had faded, which permitted a revival of the 
MSI. Yet another form was the re-creation of the traditional mass party on a 
new basis: the Lega brought people together around the theme of regional 
identity. People voted out of opinion rather than out of belief and hence 
switched their vote more easily. Yet the need for identification created — 
especially among less educated voters — parties like the Lega that divided the 
world into good and evil. Irene Pivetti's opinions on religion and Fascism are 
not typical of the Lega, but their intensity is. The myths that depict the citizens 
of Lombardy towns driving back Emperor Barbarossa and rapturous meetings 
at Pontide are designed to answer this need. Similarly the structure of the party, 
which discourages facdons and grants authority to the charismatic leader, stems 
from the Lega's role as a Gemeinschafi. 

Such uniformity masked poUtical and social differences. By 1 992 the Lega 
drew 60 percent to 70 percent of its voters from the ex-parties of government, 
but a substantial minority came from the former PCI. Socially the interests of 
working-class supporters were frequently in contradiction with those of the 
self-employed. The Amato government's decision to impose a minimum tax on 
the latter suited the former. There was a fundamental clash between Lega 
supporters who were voting primarily as a protest against Rome and those who 
were voting for the free market. The second group was tempted by Berlusconi, 
while the first saw in him the personification of the old regime. Diversity 
increased with success. When Milan fell to the Lega in the mayoral elections of 
1993, the Lega voter was likely to be better educated than before, to be 
middle-class, and to have voted PSI in the past rather than DC.-^'' He or 
she — Marco Formentini gained 57 percent of the male vote but only 43 percent 
of the female vote — was also more likely to abandon the Lega. 

Despite mistakes of strategy, such as ignoring the 1991 referendum on 
reform of the voting system, the barbarian hordes continued to grow between 
1990 and 1992. They marched out of Lombardy, incorporated the other 
northern leagues, and proclaimed the Northern Republic at Pontide in 1991. 
In the 1992 elections they won 20 percent of the vote in Lombardy and 17 
percent in the North. They were halted, albeit with difficulty, at the frontier of 
Emilia.^^ Then the Clean Hands revelanons provided fresh impetus. The Lega 
and the magistrates reinforced each other. There is truth in Bossi 's claim that 
"without our electoral victories the politicians would have sent Di Pietro to 



134 THE CRISIS OF THE ITALIAN STATE 

break stones in some Sardinian mine."^^ Conversely the magistrates gave 
credence to the Lega's tirades against Roman robbers. In 1993 Bossi himself 
was accused of taking money from Montedison, but still the Lega could claim 
victory for the politics of protest. Craxi's capital of Milan had been conquered 
by Formentini and the reprieve granted to the political system was over. 

As the prospect of power drew closer, the Lega set out its plan for a federal 
Italy. The term federation is probably incorrect and should be replaced by 
confederation because there was to be no more Italy but rather an Italian 
Union. ^'' There would be three republics: Padania in the North, Etruria in the 
Center, and a southern republic, which has not earned the dignity of a name. 
Associated with them would be the autonomous regions of the Valle d'Aosta, 
Trentino-AIto-Adige, Friuli-Venezia Giulia, Sicily, and Sardinia. Most of the 
power would be held by the republics, which were to have their own parlia- 
ments. Power over foreign and defense policy, justice, and money were left to 
the Union, which was to have an elected legislative body and a directly elected 
prime minister. However economic power would be the prerogative of the 
republics. 

This vision is consistent with the Lega's history. It offers freedom from 
Rome and a Padania government that can implement free market policies. From 
our perspective it may be viewed as an extreme attempt to solve the problem of 
the Italian state. It consigns to the scrap heap both the DC project of finding 
a mass Southern base to support the interests of northern industry and the PCI 
dream of a Gramscian alliance between a southern peasantry and a northern 
working class. It would simply do away with the bureaucracy, which it considers 
unreformable. Since the Lega gained power less has been heard of the indepen- 
dent republic of Padania and perhaps the Lega's confederation will serve 
merely — but this would be important — as a catalyst for fiscal federalism. As a 
vision it is an indication of, rather than a solution to, the breakdown of the 
postwar order. 



THINGS FALL APART AND THE CENTER DOES NOT HOLD 

Craxi's image as a bold decision maker was designed to appeal to the modern 
segments of Italian society, which admired efficiency.^^ However between 1987 
and 1989 he played an obstructive role. The government crisis of 1987 lasted 
four months and was so bitter as to make DC and PSI implausible coalition 
partners. Craxi was equally bitter in his onslaught on President Cossiga.'^^ The 
republic's institutions were further discredited two years later when De Mita's 



From Craxi the Exacter to Bossi the Spoilsport 135 

government fell in another long crisis, artificially prolonged by the PSI, which 
wanted to use the European elections as a test of PCI strength in order to decide 
whether to force national elections. Cossiga cooperated, allowing Giovanni 
Spadolini to waste several days in an "exploratory" mission, which had no reason 
for existence. PSI manipulation was clear when the objections, which it had 
made to De Mita, vanished as soon as Andreotti become the DC candidate. ^° 

The CAP (Craxi-Andreotti-Forlani) period began with the all too obvious 
agreement that Craxi would become Prime Minister after the 1992 elections, 
while Andreotti piled up power to bid for the presidency, and Forlani maneu- 
vered to defeat him. In 1991 Cossiga joined in the discrediting of the institu- 
tions by issuing diatribes against the magistrates, his own party, or whomsoever 
his fancy indicated. There was a logic to Cossiga's behavior. He was worried 
that the Gladio investigation might lead to him and he was demonstrating his 
ability to fight back. Cossiga was also protesting the attacks on the president's 
institutional role, which he himself damaged by his harangues. In this he was 
supported by Gianfranco Fini and thus helped the revival of the MSI. 

Meanwhile the revelations of corruption grew more frequent. In 1987 
Rocco Trane, Signorile's secretary, was arrested, while Craxi's friend, Salvatore 
Ligresti, a builder of Sicilian origin who seemed able to raise surprising amounts 
of money from unknown sources, was involved in the first of many Milan 
investigations. Meanwhile the Craxi clan exacted enormous tribute: a brother- 
in-law, Paolo Pillitteri, was the mayor, while the post of party secretary went to 
Craxi's son, Bobo, who was also named by Berlusconi to the board of AC Milan. 
Other Socialist clans occupied Salerno, where Carmelo Conte established a 
clientelistic network, and Naples, where Giulio Di Donato had to battle mighty 
DC champions like Don Antonio or Andreotti's ambassador, Paolo Cirino 
Pomicino, and Bari. The PSI replaced the PCI as the second party in the South 
by thoroughly unmodern methods. 

The DC-PSI rivalry rendered intolerable what the political system had 
long tolerated. Internal rebellions broke out: Mario Segni's plan for consti- 
tutional reform and his use of referenda to allow the electorate to speak 
directly; Leoluca Orlando's protest against DC-Mafia ties; and especially the 
revolt of the magistrates. Whereas in the 1960s the system had been sealed 
off from outside attack thanks to the United States and the PCI, now it was 
vulnerable. 

The end of the Cold War released DC voters who turned to the Lega. In 
their move toward unity the EC countries began to wonder aloud what closer 
ties with Italy might bring. They noted that funds allotted for vocational 
training vanished into the pockets of DC poUticians. They discovered they were 
paying CAP money to nonexistent Southern farmers. Helmut Kohl asked 



136 THE CRISIS OF THE ITALIAN STATE 

rhetorically whether there was a risk that organized crime could spread out into 
neighboring states.^' The need to hold the value of the lira against the mark 
introduced tension into the Italian economy. 

Growth held up well in 1989 at 3.2 percent, but inflation ran at 7 percent, 
double the French rate. In January 1990 the lira entered the narrow band of 
the EMS, but as the world economy declined, growth for 1990 went down to 
2 percent, while inflation remained at 6.1 percent. Macroeconomic policy was 
contradictory because Andreotti did not cut public spending lest unpopularity 
should damage his presidential hopes, while the Bank of Italy protected the lira 
with high interest rates. The deficit could only increase, financed and worsened 
by the BOT. 

By the summer of 1991 the EC had joined the IMF in calling for deficit 
reduction, but the fall budget showed no political courage. The Employers 
Association, fearful of the 1992 deadline, was louder than usual in its criticism 
of the way public sector wages were pushing up labor costs in the private sector. 
The association backed the June 1991 referendum because it considered that a 
more efficient Italian state was a prerequisite for competing with French and 
German industrialists. 

The referendum was the clearest sign of discontent with the political 
system. It started as Segni's revolt from within the DC, and then it received 
PDS backing. A modest proposal to reduce the number of preference votes to 
one, it became the litmus test of faith in the regime because Craxi advised the 
electorate "to go to the beach." 62.5 percent of voters disobeyed and 95.6 
percent of them voted as Segni and Occhetto indicated. This manifestation of 
disaffection foreshadowed the defeat of the CAF in the 1992 elections. 

Another early signal was the growing demand for reform of the state 
apparatus. In 1990 a law was passed that limited the secrecy of decisions, allowed 
more controls, and increased the accountability of civil servants (Law 241). 
Parallel to the rise of the Lega went the move toward decentralization. In the 
same year a new law gave greater power to local officials, made possible 
privatization of some services, and introduced local referenda (Law 142). Both 
trends were accelerated after 1992 and the innovation of the direct election of 
the mayor came in 1993. Although such changes increased citizen power, it is 
hard to see how they can make a decisive difference without a more radical 
reform of the central state apparatus. ^^ 

Of all the overlapping reasons for the regime crisis that the 1992 elections 
exemplified — the end of the Cold War, EC pressure, the defections from 
within the DC, the disaffection of the magistrates, and the rise of the Lega — the 
one I would like to stress is the change in Italian society. The Censis survey 
for 1990 detected a widespread frustration with the social services and with 



From Craxi the Exacter to Bossi the Spoilsport 137 

the self-perpetuating, directionless rule of the DC-PSI coalitions, but also a 
"waiting stage, "^^ during which people were reluctant to act. In 1991 it 
reported the same massive distrust of the parties, a concern about the spread 
of organized crime to the North, and a coolness toward Europe that was linked 
with doubts about Italy's ability to compete. However, now the mood was 
active and Italians were eager for change. 

The strong protest vote in the 1992 elections stemmed from this mood, 
which was, however, complex. The "new" culture in Italian society distrusted 
intermediaries and sought a greater role for itself. It favored decentralization 
and privatization. It was proud of its professionalism and tended to associate 
politics with competence. This made it dissatisfied with the "old" culture of 
ideological parties and a cumbersome state bureaucracy. The wealthier sup- 
porters of the Lega could be attracted by technocratic and neoliberal solutions. 
However the opposite problem was also present: the new was inseparable from 
the old.^'* As Vito Gnutti's remark, quoted earlier, indicates, the emerging 
small businesses did not wish to do without the state, even if they distrusted 
it. The two trends could overlap in creating a new and different state. But if 
unsuccessful they could fall back, each in its own way, on the time-honored 
methods of forming clans to reallocate the resources of the weak state and of 
withdrawing to fresh forms of traditional allegiance — the family and local 
networks. The Clean Hands investigation was about justice and citizenship, 
but it was inseparable from a struggle for wealth and power. In 1992 the fourth 
attempt to (re-)found the Italian state began. 



8 



February 1992 to March 

1994: Revolution and 
Restoration? Or Change? 



Certainly these two years often seemed like a revolution. The postwar 
political order collapsed and Giulio Andreotti's career ended. Clearly the 
Berlusconi government can be seen as a restoration: the Prime Minister is a 
former member of the Craxi clan and the overlap between political and 
economic power is more apparent than ever. However the downfall of the 
DC-led state was a process of change: it was both a regime crisis and a crisis of 
modernization. To oversimplify, the urban middle classes of Northern Italy ' 
decided that the DC-PSI governments no longer served their interests. So they 

decided to change the political system. 1 

This view implies that the old regime was not all bad and that Italy is 
capable of achieving incremental change. The privatization of Comit and 
Credito Italiano is the culmination of a series of banking and financial reforms, 
begun afrer Italy entered the EMS in 1979. Similarly there is no reason to 
perceive the Berlusconi phenomenon merely as a restoration. One reason why 
Forza Italia won the 1994 elections was that a bloc of voters felt it would provide 
the leaner, more efficient state that a modern economy needs. This does not 
mean those voters were right: I shall argue in chapter 9 that they were mistaken. 



140 THE CRISIS OF THE ITALIAN STA TE 

At the core of the debates lies the familiar but thorny problem of the 
Italian state. From the 1950s on, the state had changed from a besieged to an 
overbearing force, and the PDS and Forza Italia could agree that its invasion of 
civil society must be beaten back. Privatization and decentralization were pillars 
in the programs of Left and Right alike. Yet countries find it hard to correct 
their historic distortions and it is far from clear that Italy is doing away with 
the overworked state. 

Change took many overlapping and oblique forms in the two-year span. 
One may argue that the year between the 1992 elections and the April 1993 
referendum was a period dominated by a tearing-down process, while the next 
year was a time of reconstruction. Yet economic policy was consistent at least 
up to the 1994 elections. The various strands in the tale began to intertwine. 
The murders of Falcone and Borsellino heightened public anger with the 
political class, but in the 1994 elections economic issues were more important 
than either the anti-Mafia struggle or the Clean Hands inquiry. This chapter 
takes the form of a story, whose main but often hidden protagonist is the state. 



THROW THE RASCALS OUT 

N^The Clean Hands operation began on February 17, 1992, when Mario Chiesa, a 
' PSI official and head of an old people's home. La Biaggina, was arrested in Milan. 
However he did not turn state's evidence until Antonio Di Pietro had left him to 
languish in jail for a few weeks. Then there was a small spate of further arrests and 
newspaper articles. These were overshadowed, however, by the March 12 murder 
of Salvo Lima in Palermo. In Milan the magistrates were moving cautiously, 
fearful that they would be accused of interfering with the April 5 elections. ' 
Afterward they quickened their pace and by mid-June, 16 PSI, 14 Christian 
Democrat, and 7 PDS politicians were informed that the magistrates considered 
them suspects. The prime target was the Craxi clan, but by September 1993, 
2,600 people were under investigation, including 325^pafliamentarians. 

The first questions that the arrests and revelations pose are: Why did they 
come as such a shock? and Why did they come at this point? After all bribery 
was^ endemic, ranging from micro-illegality to systemic corruption. It had been 
discussed in sources available to the general public. To take only one example, 
Adriano Zampino, a surveyor whose confessions had helped bring down the 
Turin city council some ten years earlier, had declared to La Repubblica that "I 
am no different from 90 percentof businessmen who work on public contracts." 
The politician was "like an addict in search of drugs, he always needs money." 



February 1992 to March 1994 141 

Dismissing any distinction between the political class and civil society, Zampino 
added that "the system works in the private sector too."^ 

To say that most Italians "knew" of corruption is to underestimate the 
complexity of the verb "to know." An occasional newspaper article is different 
from the flood of details that deluged Italy from April 1992 onward. However 
the previous awareness suggests that corruption was not the cause but the 
catalyst of a greater anger. The De Lorenzo scandal unleashed pent-up wrath 
with the public health service; the real issue was the low level of care. 

Since the health service was no worse than it had been ten years earlier, 
why were its deficiencies exposed in 1992 rather than in 1982? A full answer 
involves all the themes already discussed, but clues to the immediate reasons lie 
in the Milan magistrates' initially slow pace in investigating abuses and in Rossi's 
statement about De Pietro breaking stones in Sardinia. In addition, the April 
1992 elections weakened the DC-PSI power system. 

Initially, voter irritation was still muted. The four parties of the governing 
coalition had a majority of seats in the House — 331 out of 624. However the 
margin was too small to permit the traditional clan warfare. Moreover the 
coalition won only 47. 1 percent of the vote, the DCs share went down by 4.6 
percent, and the PSI's record of improving in each election was broken, as its 
share declined from 14.3 to 13.6 percent. The parties of responsible opposition 
also fared badly. The Republicans increased their share of the vote by a mere 
0.7 percent to 4.4 percent, which Nvas-a poor reward for their withdrawal from 
the Andreotti government in 1 99 1 .' It was a hint that the electorate was seeking 
parties that were more clearly new or different. 

The PDS's 16. 1 percent was a disappointment to Achille Occhetto. That 
the party had survived the collapse of world Communism was testimony to his 
courage in changing its name and symbol, as well as to Berlinguer's sense of the 
state and to Togliatti's heresies. The 5.6 percent lost to Rifondazione Com- 
unista was evidence of the PCI's orthodoxy. The criticism that could be leveled 
against Occhetto is that he made the change so hesitantly that he lost the 
chance — if it ever existed — to create a broader Left around the PDS.^ This 
problem recurred two years later. 

By contrast the parties of protest, such as RC, fared well. Best of all was the 
Lega, whose performance was a death blow to the DC in northern Italy. The MSI's 
share went down by 0.5 percent, which demonstrates that the causes of its 1994 
success were not yet present. But these three parties, along with the Rete, the Verdi, 
and the remnants of the Partito radicale gained 25.3 percent of the vote. 

Voter irritation was heightened by the state of the economy. To return to 
the "why now?" question, the specific reason for the anger with the social services 
was that their cost was much greater. Government revenue as a percentage of 






142 THE CRISIS OF THE ITALIAN STATE 

GDP had risen from 33.3 percent in 1980 to 43.3 percent in 1991. In general 
the contradictions of Andreotti's government had grown sharper. The debt had 
increased over 20 years and by 1992 it stood at 103 percent of GDJEi^ One of the 
effects was pressure on the lira, which had to be defended with special care because 
in December 1991 Italy had signed the Maastricht agreement with its commit- 
ment to monetary union. This required austerity, yet Andreotti allowed domestic 
spending to continue, which drove up inflation. It reached 6.2 percent in 1991, 
which was 3.5 percent higher than the Maastricht guidelines. However, despite 
domestic demand, because of the world recession, exports were declining, which 
caused rising unemployment in the northern industries. 

It was growing harder to find room to maneuver within the confines of the 
EC requirements. In harmony with the trend toward independent central banks, the 
government gave the Bank of Italy freedom to set the discount rate in January 1992. 
In the previous October it had given the banks greater control over the use of their 
required reserves. This was pan of a package to enable Italian banks to compete once 
free trade in services was introduced by the Internal Market. JHowever both innova- 
dons reduced the government's ability to finance its debt. Here again public concern 
about the economy was muted and the financial crisis came only in the summer. ] 

In the meantime the old regime demonstrated the blows it was receiving 
in the election of the President and the choice of Prime Minister. The CAP 
arrangement that Craxi should take the second post and either Forlani or 
Andreotti the former, was undermined by three factors. The parliamentary 
majority was too exiguous to tolerate the clan divisions. The Milan magistrates 
were undermining the position of the DC and the PSI.JThe Mafia strategy of 
confronting the state, which took the form of murdering Giovanni Falcone on 
May 23, forced the regime to change.]! 

As if to demonstrate that the order could no longer function, President 
Cossiga resigned after the election. This disturbed the plan that he would ask Craxi 
to form a government, after which the Socialists would concede the presidency to 
the DC. So the presidential vodng took place before the trade-offs had been made. 
The splits within the DC, where Forlani's leadership was contested by the reformist 
Segni, by the "left-wing" faction of De Mita and, more discreetly, by Andreotti's 
supporters, dragged out the process, which was not in itself unusual. But the 
revelations of corruption created a demand for that elusive creature, a clean 
candidate. Oscar Luigi Scalfaro's election became possible. The Mafia promoted 
it when they killed Falcone; his murder triggered a moral revulsion that made 
further intrigues appear scandalous. 

It is unlikely that the Mafia sought to influence the presidential choice. The 
murder was part of a war with the state that stemmed from the breakdown of 
complicity. Over the next two years this strategy would provoke an energetic 



February 1992 to March 1994 143 

response from segments of the judicial and political class. Its effects would be to 
further damage the DC, as evidence of its former complicity emerged, and to 
drive the state toward reform. The Mafia has also suffered severe defeats. However 
the outcome of this war, as of so many other matters discussed in this chapter, 
remains uncertain. 

The reasons for the decline of complicity may be sought in the behavior 
of both the Mafia and the DC. Until the 1980s^the Mafia had lived by the rule 
that it "should not make war on the state. "^u hen the overlapping factors of th^ 
huge sums of money brought by the drug trade and the coming to power of the 
militaristic Corleonesi, led by Toto Riina, made the rule obsolete. The Mafia 
had always sought to deal with the state as an equal; now if equality were refused, 
there would be war. 

The very ferocity of the Corleonesi made it difficult for the government 
to grant what they wanted — impunity or at least light sentences. Other obstacles 
were Italian public opinion, especially after organized crime moved north, and 
pressure from the EC. Helmut Kohl's rhetorical question was typical, while the 
Maastricht plan for closer cooperation among Ministries of the Interior and 
police forces reduced the space for delicate compromises. 
_iv^For these and other reasons the convictions at the mass trial of 1986 were 
not overturned in the appeals courts and Salvo Lima was killed. This was a 
warning. Falcone, who knew so much about the Mafia, was killed next and then 
came Paolo Borsellino. The bombings in Florence, Rome, and Milan during 
the summer of 1993 were committed by the Mafia. Riina has been nothing if 
not consistent: in May 1994 he indicated Luciano Violante, Giancarlo Caselli, 
who replaced BorseUino in Palermo, and Pino Arlacchi as Communists and as 
enemies to be dispatched.^ The resort to warfare does not mean that the Mafia 
has given up the quest for allies within the political and legal system. It is 
pursuing both strategies, believing that fear will spur complicity. 

Meanwhile a furious Craxi was forced to recognize that the Milan scandals 
were an insuperable obstacle to his being designated Prime Minister. He made 
way for his advisor, Giuliano Amato, at the head of the four-party coalition. 
Although the new government looked like so many old governments, it was 
different.' First, there was no alternative to it. Throughout the postwar years 
governing coalitions had been made and unmade but the principles on which 
they rested — DC leadership, PCI exclusion, proportional representation — 
remained inviolate. Now these were vanishing, but the elections had brought 
no new potential rulers. The PRI and the PDS had no desire to be branded by 
the Lega or RC as the saviors of a discredited regime. Within the coalition the 
clans had to expend all their energy on trying to escape prison, so they had none 
left to challenge Amato. This liberated the government in its economic policy. 



144 THE CRISIS OF THE ITALIAN STATE 

The second novelty was the Prime Minister himself. Amato was an 
intelligent reformist, the author of a 1990 law on banking that opened the way 
to privatization and reversed the 1936 law that forbade banks to hold shares in 
industry. He was also Craxi's collaborator for whom Socialist corruption held 
no secrets. From June 1992 to April 1993 Amato watched as the men with 
whom he had worked were politically destroyed. Within his own party alone 
De Michelis, Ando, and Di Donato were placed under investigation. The PSI's 
deputy leader, Claudio Martelli, made a doomed attempt to reform the party 
before suddenly abandoning politics in February. Craxi was allowed to hang on 
far too long as Secretary and, even after he resigned, parliament voted in April 
not to remove his immunity. Five party secretaries had to be replaced in the 
lifetime of the Amato government, and ministers — De Lorenzo was only the 
most serious case — departed regularly at the behest of magistrates. 

Yet even as he presided over the death throes of postwar Italy, Amato made 
a brave attempt to tackle the economic crisis. In the summer of 1992 the 
contradictions of Andreotti's policy exploded: the projected deficit stood at 
$120 billion and the lira was exposed. Amato responded with measures to cut 
the deficit by $20 billion. Some of his fiscal maneuvers were one-off, as opposed 
to structural, and of dubious legality, such as the tax imposed on bank accounts. 
However Amato also attempted structural reforms. In a July 31 agreement the 
government endorsed an employer- union plan to scrap wage indexation. This 
prepared the way for the July 1993 agreement, which outlined a new framework 
for collective bargaining. 

fin September Amato produced a package that included severe cuts in 
social spending, especially in health care and pensions. Although attacked by 
the PDS, RC, and the unions as unjust, the package and the follow-up 1993 
budget both limited the financial damage and at least tackled underlying Italian 
problernsj Health care was to be administered by the local and regional 
authorities but financed by the central government; Amato transferred the 
responsibility for controlling costs to the regions. Budgetary overruns were to 
be financed from their resources, but they were granted some increased auton- 
omy in taxation. This was a step toward uniting the fi4nctions of administration 
and finance and toward a more real decentralization. In the sphere of pensions 
Amato raised the general retirement age, cut back indexation, and tried to 
reduce the opportunity for early retirement. He took a tiny step toward 
abolishing the special pensions that the DC had used for clientelistic purpose&i 
To deal with income tax evasion, rampant among self-employed professionals, 
Amato imposed a minimum tax on the self-employed.^ 

In September he froze public sector salaries, which in 1991 had risen by 
8 percent and in 1990 by 18 percent. In the 1993 budget he changed the 



February 1992 to March 1994 145 

Structure of public sector pay. He reduced parliament's power to grant increases, 
subjected pay to civil not administrative law, set up an autonomous body to 
negotiate with the public sector unions, encouraged the kind of contracts used 
in the private sector, and tried to link wages to productivity. The budget also 
contained a clause requiring parliament to provide financial coverage for any 
new expenditure it passed.__; 

The principles of -financial responsibility and of disciplining the public 
sector, which underlay these measures, mark an attempt to reform the over- 
worked state and to give more responsibility to civil society. Amato was 
unfortunate in that such principles, which signaled a break with DC rule and 
would guide the Ciampi government, were overshadowed by popular resent- 
ment of austerity that inevitably hit poor people hardest. To the demonstrators 
who thronged the piazzas the rewards were all the less clear because financial 
problems continued. Thus while government spending excluding interest on 
the debt did not exceed revenue for the first time in 30 years, interest payments 
were so high that the 1992 deficit was 10.7 percent of GDP, the same figure as 
1991, while the debt rose from 103 percent to 108 percent of GDP. Nor did 
the austerity measures save the lira, which was first devalued by 7 percent and 
then forced out of the EMS in September 1992. 

The total devaluation amounted to around 20 percent and it was the 
start of a long-term, export-fueled revival, in which small companies demon- 
strated the same dynamism as in the 1970s. For this Amato can take no credit, 
although his reforms of the public sector must in the long run help private 
employers. He was tough enough to terminate the economic fiction of EFIM, 
even if a plan to repay creditors with long-term government bonds paying 
submarket rates caused outrage in the international financial world and had to 
be withdrawn. His government drafted a plan for extensive privatization of 
banks and industrial companies; this continued his 1990 law and was in part 
enacted by Ciampi. 

The rewards of austerity were present if not evident. By October 1993 
inflation was running at 4.2 percent, 1 percent below the pre-devaluation rate, 
while the increase in unit labor costs declined steadily from 7.6 percent in 1991 
to 3 percent in the first half of 1993. The discount rate, which had been raised 
to 15 percent in September 1992, stood at 1 1 percent when Amato left office. 
The price of austerity was a worsened recession: in the second half of 1 992 GDP 
dropped by an annualized rate of 1.2 percent, the first decline in a decade. 

The immediate political consequences of the crisis and Amato's handling 
of it were to reinforce the Clean Hands revelations by increasing popular anger 
v/ith the political class. Another result was to make unemployment a central 
concern: between mid- 1 992 and mid- 1993 the unemployment percentage rose 



146 THE CRISIS OF THE ITALIAN STATE 

> from 11.1 to 13.1. In companies employing more than 500 people employ- 
ment was reduced by 6 percent and the number of hours covered by the Cassa 
Integrazione Guadagni (CIG), which provides compensation for the tempo- 
rarily unemployed, was increased by 23 percent.^ While unemployment 
heightened political protest, it marked a more significant shift. Economic 
issues rather than corruption or institutional reform would decide the 1994 
elections, j 

In tne winter of 1992-93 Italy was living through the destruction of the 
old political order. Local elections made clear the fate of the DC and the PSI. 
In September support for the DC went down by 7.7 percent in Mantua and in 
December it dropped by 6. 1 percent in Monza. Even more ominous was its 7.3 
percent decline in Reggio Calabria, which revealed that its southern bastion was 
crumbling. The MSI's share of the vote leaped from 8.4 percent to 1 6.6 percent, 
a harbinger of its success the next year. 

The DC attempted reform and Mino Martinazzoli, who was un- 
touched by the Clean Hands investigation, became party Secretary on 
October 12, 1992. But the old leaders were tainted by more than bribery. 
In March 1993 Gava's ties to the Camorra were exposed, while in April 
Andreotti's parliamentary immunity was removed so that the investigation 
into his links with the Mafia could go ahead. Forlani's Secretary was dragged 
off to prison in chains and Forlani himself would reappear, reluctantly, in 
the Enimont trial. Clientelism had turned against the DC. However, the 
party retained two assets. [The first was the Church, which continued to see 
the DC as the main instrument of its power. The second was Mario Segni, 
who was leading the battle for institutional reforrnJTo the chagrin of the 
Council of Bishops, Segni left the DC on March 29, 1993, declaring that it 
could not be reformed; however, the Church hoped Segni might repent and 
acted to ensure that he did. 

The PSI had no such assets so it simply disintegrated. In the local elections 
it lost 25 percent of its previous vote and was severely punished in Lombardy. 
In Varese its share plunged from 10.6 percent to 4.2 percent and in Monza 
from 12.9 percent to 5.5 percent. It too attempted reform with first Giorgio 
Benvenuto and then Ottaviano del Turco as Secretary, but its attempt to use 
union leaders to revive popular support failed. 

Once more the PDS, which presented itself as the party of responsible 
opposition, was unable to win the mass of DC or PSI votes. It did, however, 
suffer far less than its rivals, losing only 2 percent in Mantua. Occhetto's task 
was to demonstrate that the PDS-PCI, while it had been tainted with corrup- 
tion, stood outside the DC power system. In general he was successful. The 
Milan branch had sinned, but this could be blamed on the Right of the party, 



February 1992 to March 1994 147 

one of whose leaders, Gianni Cervetti, was placed under investigation. The role 
of the PCI-PDS in obtaining public contracts for the red cooperatives and of 
the co-ops in steering profits back to the party was frequently cited, but did not 
become a major issue until December 1994. The Ferruzzi group had paid a 
large bribe to a PCI official, Primo Greganti, but he swore he had kept the 
money for himself; he was either a rogue or the model Communist militant. 
The PDS leaders had not enriched themselves personally. The memory of 
Berlinguer counted for something and Occhetto never failed publicly to praise 
the magistrates. 

So the PDS became by default the only strong party in Italy. It had the 
opportunity, which it had been seeking since its 1989-91 transformation, to 
become the cutting edge of a Left-Center coalition. Conversely the prospect of 
a PDS-led government would galvanize the Right. 1993 was Occhetto's year, 
1994 would be Berlusconi's. 

In the local elections of late 1992 protest continued to dominate. In 
Varese the Lega, whose share jumped 9 percent to 37 percent, had more votes 
than the DC, PSI, and PDS combined. RC and the Rete also performed well. 
In March 1993 the Amato government discovered how strong the mood of 
anger was. The magistrates were methodically mowing down Italy's elites and 
it seemed they might never stop. Whether in a desperate attempt to halt them, 
or because genuine problems had arisen, such as the backlog of trials and the 
unemployment in the construction industry that stemmed from the blocked 
public contracts, the Minister of Justice, Giovanni Conso, produced a decree. 
It transformed the illegal financing of parties from a crime, punishable accord- 
ing to the usual procedures, into a an offense that could be canceled by 
repayment, a fine, and a five-year ban on holding office. The PDS and the Lega 
did not need to organize opposition. An outraged public understood only that 
the politicians were granting themselves an amnesty. Fury ran so high that the 
decree was swiftly forgotten, while Amato offered to resign.' 

He stayed until April 18. As in 1991 the referendum was the means of 
making the changes that the parliamentary majority sought to block, and 
institutional reform was the road to political reform. |The author of the 
referendum, which called for senate elections to use the British, winner-take-all 
system for 75 percent of the seats with the remaining 25 percent left to 
proportional representation, was once more Mario Segni, who was backed again 
by the PDS. Their goal was to create something like the two-party system, to' 
bring about a clear electoral victor, and to give the voter rather than the party 
secretaries the power to choose the government. The electorate understood this: 
The turnout was high — 77 percent — and the yes vote won by 83 percent to 17 
percent. It was accepted that the method of voting for the House would be 



148 THE CRISIS OF THE ITALIAN STATE 

altered too and with the end of full proportional representation (PR) another 
pillar of the old regime came crashing down. ' 

The series of events in April — the referendum, Amato's resignation, and 
the disgrace of Andreotti — marked the end of the first period within the 1992 
to 1994 years. Already in 1992 Censis saw "a growing need for leadership." '° 
People wanted organization, a word that Berlusconi would use frequently. 



OCCHETTO RULES! 

The demise of the old regime was reflected in the choice of Carlo Azeglio Ciampi 
as Prime Minister. Ciampi was not a politician and as President of the Bank of 
Italy he was the leader of almost the only elite that had not been mown down. 
The bank was historically suspicious of the political class, which it considered 
uneducated and spendthrift. So Ciampi brought economists into his government 
who moved in the bank's orbit, like Luigi Spaventa, or who had been marginalized 
by their parties, like Beniamino Andreatta. Romano Prodi returned to head up 
IRI. This was supposed to be a transitional government, which would supervise 
the change of voting procedures and organize elections to renew a delegitimized 
parliament. In fact it remained in office nearly a year and took significant action. 
Its transitional character freed it from the parties, which were now preoccupied 
not just with staying out of jail but with the elections. 

In June local elections were held in Milan, Turin, Catania, and many 
smaller towns. TThey used the new electoral method — direct election of the 
mayor and two i^ounds of voting — that the parliament had passed in March. As 
well as marking a shift of power from center to periphery, this new method 
offered a trial run for the parliamentary elections because it entailed coalition- 
building. Since the Lega sought no allies and could not have found them and 
since the DC was in chaos, coalition-building was the prerogative of the 
Left — RC, the Rete, and the PDS — of the Center-Left — the Republicans and 
Alleanza Democratica (AD) — and of Segni's dissident Christian Democrats. 

The campaign demonstrated that the key alliance of the referenda, that 
between Segni and Occhetto, was fragile. The two came together in Catania 
behind the Republican who won, Enzo Bianco, but more often they disagreed, 
as in Milan where both lost. This failure, which would help shape the 1994 

"e- elections, was not just another example of the fragmentation of Italian culture. 

— ^ Some of the problems were inherent in coalition-building: Segni had a wider 
following as an individual, while the PDS had a more powerful organization. 
If the two were to come together in a structure such as the AD, then Segni 



February 1992 to March 1994 149 

wanted the dissolution of existing party organizations into a broad movement 
that he would head. Occhetto, however, having spent two years persuading his 
rank and file to transform the PCI into the PDS, could hardly now ask them 
to give up their new home. 

But the breakup of the referenda alliance, which did not occur officially 
until the fall, was caused by such factors as Occhetto's refusal to break with the 
RC and the pressure that the Church placed on Segni. These were signs of a 
deeper incompatibility that continued to separate the ex-Communists from the 
post-Vatican II Catholics. If they were to shape the new regime as they had 
shaped the old — by their co-operative antagonism — the heirs of Togliatti and 
De Gasperi, and of Berlinguer and Moro, would this time have to work together. 
But they could not, and their failure would open the door to Berlusconi. Their 
old differences took new forms: abortion replaced atheism./^' 

Still, the PDS emerged as the chief winner in the June elections. In its 
traditional territory it swept the towns of Ravenna, Ancona, and Siena, while 
in the South it once again became the second party and surprised itself by its 
performance in Campania. It spearheaded the coalition that won Turin for 
Valentino Castellani after he had run 16 percent behind Diego Novelli of the 
Rete on the first round. Turin and Catania proved that Occhetto was a talentecL, 
alliance-builder. 

However the victory masked weaknesses. In Milan and Turin the PDS 
won only 9.5 percent and 8.8 percent of the vote, running behind RC to which 
it lost much of its working-class support. Then too the successful candidates it 
supported were well to the right: Castellani was a Catholic who was also 
endorsed by Agnelli. The collapse of the DC had left a huge space that centrist, 
PDS-backed candidates could occupy. That did not mean the PDS itself could 
occupy this space, or that a Center-Right party would not emerge to compete 
for it. 

The mood in the country was changing, perhaps in response to institu- 
tional reform. Able to cast a "real" vote, the electorate rewarded competence as 
well as protest. This was evident in Milan, where Marco Formentini won in 
part because he was challenged from what was perceived as the Far Left, the 
Rete's Nando dalla Chiesa, and in part because he projected a practical image. 
The Lega swept across the North. It was the largest party in Vercelli, Novara, 
Pavia, and many smaller towns, as well as in the region of Friuli-Venezia Giulia. 
Its anti-statist discourse was all the more popular because of the corruption 
revelations. However the Lega faced difficulties: the local elections revealed that 
it too needed allies — in Novara its 26.8 percent was nearly 10 percent ahead of 
any other party but it \yas 5 percent behind the Left coalition — and it had to 
now demonstrate that it could govern. 



150 THE CRISIS OF THE ITALIAN STATE 

For the DC the elections were a disaster outside the South. Another 
warning came in Trieste as the party's share dropped from 22.4 percent to 14 
percent, while the MSI's rose to 17.1 percent from 12.2 percent. In Sicily, 
however, the DC held on to Agrigento and remained the largest party in 
Catania. Although its share of the vote declined, the DCiemained strong south 
of Rome with around 30 percent of the electorate.! However as corruption 
revelations merged with reports of ties to organized crime and as sources of 
clientelism dried up, the DC faced the greatest difficulties of the three parties. 

The November-December round of local elections confirmed this. Over 
the summer the Church had made it clear to Segni that it was backing 
Martinazzoli and that it would do its utmost to prevent him from gathering 
Catholic support." The result of Segni's painful meditations was that he broke 
with Occhetto and with AD, but he did not rejoin the DC. Thus he weakened 
the Left, isolated himself, and did not help his old party. 

Martinazzoli soldiered on, but in the local elections the DC collapsed in the 
South. In Remo Gaspari's stronghold of Chieti the MSI, whose share jumped 
from 25 percent to 36 percent, took over the council. The neo-Fascists won four 
provincial capitals — the others being Benevento, Latina, and Caltanissetta — and 
became with 16.4 percent the fourth largest party in Italy. Not only were the DCs 
losses in the South severe — in Caserta its share dropped by 30 percent — but in 
the mayoral races of Rome and Naples it could not present serious candidates. In 
Naples it ended up endorsing Togliatti's ex-Secretary, Massimo Caprara, while 
in both cities it was eliminated on the first round. On the second round its votes 
were split evenly between the MSI and left-wing candidates. Gianfranco Fini's 47 
percent in Rome and Alessandra Mussolini's 43 percent in Naples marked the 
MSI's success in supplanting the DC. 

The Left not only won both cities but also swept Venice, Trieste, Genova, 
and Palermo, where Leoluca Orlando was elected on the first round. Genova 
reinforced the lesson of alliances to the Lega because its vote rose 15 percent to 
29 percent and it became the largest party, yet it lost the mayoral race to the Left's 
candidate, Adriano Sansa. These elections were Occhetto's triumph and yet they 
revealed the PDS's weaknesses. Of all the new mayors only Antonio Bassolino 
was a leading PDS exponent, while in Trieste Riccardo Illy was an entrepreneur — 
an example for Berlusconi? Both he and Sansa were Centrist candidates operating 
with scant opposition from the Center-Right. Moreover the specter of a Left- 
Center government hegemonized by the ex-Communists would and did galvanize 
Berlusconi. He understood that many Italians were voting for clean faces and 
competence, that they were not quite ready to vote Lega or MSI, but that they 
were unenthusiastic about the PDS. Finally the size of the voting swings revealed 
how mobile the electorate was. Occhetto's rule would be short-lived. 



February 1992 to March 1994 151 

STATE VERSUS MAFIA 

Throughout 1993 the war on the Mafia continued under both the Amato and 
Ciampi governments. In January Toto Riina was arrested after long years "on 
the run." In fact many Mafiosi who were fugitives from justice had simply gone 
on living in their home neighborhoods. Like other citizens, they sent their 
children to state schools. When they met policemen, each looked the other way; 
'^ a policeman who hunted down fugitives was likely to be murdered.'^ Those 
glances of nonrecognition were the mark that the state in fact recognized the 
Mafia's role in the postwar order. 

Riina's arrest after long years of tranquil existence in Palermo marked a 
break. It did not change Mafia strategy, which continued, under Bernardo 
Provenzano, the new Corleonese leader, to emphasize military struggle. Tommaso 
Buscetta considered this an error and argued with unconscious irony that Riina 
was destroying Cosa Nostra. The chairman of the Anti-Mafia Commission, 
Luciano Violante, agreed, stating that the campaign against the Mafia was going 
well because "institutions and civil society have now grown very aware" of the 
Mafia threat. '^[Citizen support in Sicily and more efficient work by police and 
magistrates who were sure of government backing were the marks of a state that 
was no longer absent and did not inspire in its population merely distrust, i 

The state's victories over organized crime took several forms. The most 
obvious was the wave of arrests, which led to the jailing of Nitto Santapaola, 
the Catania chieftain, and Carmine Alfieri, who decided to collaborate with the 
authorities. Then too a blitz in January 1994 led to the arrest of 62 members 
of the 'ndrangheta who were operating in Lombardy, and, significantly, the first 
initiative taken by the Lega Minister of the Interior, Roberto Maroni, was 
another onslaught on the Lombardy 'ndrangheta in June 1994. 

Just as important has been the peeling away of the Mafia's allies. The trial 
of Bruno Contrada drew attention to the overlap between segments of the secret 
service and the Mafia. Violante's report dealt with Mafia infiltration of Free 
Masonry, while the issue of the Church and the Mafia was posed dramatically 
in the autumn of 1993. A priest working in a poor parish of Palermo was 
murdered and, conversely, allegations of complicity were leveled against Bishop 
Salvatore Cassisa of Monreale, who was called a close friend of Salvo Lima. Nor 
did magistrates escape. A dramatic moment occurred in the revelations of the 
Camorrista who turned state's evidence, Pasquale Galasso, when he told the 
Campania magistrates, "Gentlemen, many of you are not cops, many of you 
are on^our side."''* 

I The most controversial subject of the investigation has been the Mafia's 
links with the DC and in particular with Giulio Andreotti. This includes the 



152 THE CRISIS OF THE ITALIAN STATE 

allegations that the Mafia may have murdered two men as favors to Andreotti: 
Mino Pecorelli, who ran a blackmailing newsletter, and Alberto Dalla Chiesa, 
who supposedly had compromising evidence on Andreotti 's behavior during the 
Moro kidnapping — although the Mafia had ample reasons of its own to want 
Dalla Chiesa dead. The Andreotti faction in Sicily has been described as "polluting 
political, social and institutional life," and Andreotti has been called the political 
leader who "for a long period assured the continuation of Mafia power." 
According to this view Andreotti was trapped in his 1989-92 prime ministership 
by anti-Mafia opinion and obliged to take such measures as sending 41 Mafiosi 
back to prison whom Corrado Carnevale had released on appeal. 

Although the state's sudden success was the result of new tactics, like the 
encouragement offered to arrested Mafiosi to collaborate with justice and the 
choice of good personnel (including Giancarlo Caselli), the real difference was 
public opinion. Violante notes that the state cannot maintain its effort simply 
by relying on its servants — the police and magistrates — but needs a strong 
public opinion to keep ministers' focussed and to outweigh the political forces 
that encourage complicity. Thus two dangers lay in wait for the BerlusconT^ 
government. 

The first was that by reacting against left-wingers like Violante, Forza 
Italia would seize on errors made by the present anti-Mafia apparatus and 
weaken the campaign. Berlusconi's Minister of Justice, Alfredo Biondi, was 
both a lawyer, accustomed to seeing the plaintiffs viewpoint, and a survivor of 
the old regime that had indulged in complicity. Tiziana Parenti, who became 
head of the Anti-Mafia Commission, offered legitimate criticism of the reliance 
on the Mafiosi who repent. When they attacked Violante as a Communist, 
Berlusconi's supporters were, however unwittingly, following Riina who, when 
he named Violante, Caselli, and Pino Arlacchi as targets, also branded them as 
Communists."^ 

The second danger was that the Mafia would succeed in infiltrating Forza 
Italia. That it was trying to do so was certain, given its history. FI's ally, the 
Centro Cristiano Democratico, sent to parliament two ex-followers of An- 
dreotti from Messina, while at least one of Lima's acquaintances was elected 
directly by FI.''^ This does not mean FI members supported the Mafia, merely 
that, as Tiziana Parenti stated, the danger of infiltration was very real.^^ Fresh 
evidence of Mafia help for FI and AN candidates emerged in January 1995. 
Conversely threats were made against local, left-wing officials. Although the 
Mafia's political alliances are grounded in pure self-interest, its history as an 
organization that defended the landowners makes it inclined to favor the Right, 
while political opposition has in recent years come more from the Left, notably 
from the Rete and the PDS. I shall return to this topic in chapter 9. \ 



February 1992 to March 1994 153 

THE CHANGING ITALIAN ECONOMY 

The economic policy of the Ciampi government continued Amato's poHcy and 
was based on the same principle — that austerity must be accompanied by 
structural change. Priority went to cutting government spending, which was 
scheduled to produce a 1994 deficit of less than 10 percent of GDP. If interest 
costs are taken out, spending ran at 1.8 percent below revenue. To deal with 
the interest payments Ciampi concentrated on reducing rates: the interest on a 
five-year government bond went down from 11. 7 percent to 7.5 percent during 
his year in office. 

The recession had bottomed out and in 1993 Italy ran a balance of 
payments surplus of $12 billion, as opposed to a deficit of $22 billion in 1992. 
In the last quarter GDP was running at +3.2 percent, as opposed to -1.8 percent 
in the first quarter. However unemployment remained high with the historic 
regional differences: a national figure of 11.3 percent broke down into 7.7 
percent for the Center-North and 18.9 percent for the South. The working 
class continued to change and to shrink as there was a 7.1 percent decline in 
blue-collar employment, compared with a 3.6 percent decline in white-collar 
jobs. The overall figure of -5.5 percent explains why Berlusconi's promise of a 
million jobs was so seductive. '^ 

The Ciampi government's greatest achievement was the July agreement 
on incomes policy and bargaining, which set up a new tripartite structure for 
collective bargaining. Employers gained concessions in labor market flexibility, 
such as greater freedom to use temporary workers and lower entry wages for 
jobs in which training was given. Unions gained stronger representation rights 
at the plant level, although local pay increases were to be awarded only when 
they were in step with profits. Most important, a bienniel meeting of govern- 
ment, employers, and employees is to set a low target of inflation with provisions 
for reducing public indebtedne,ss and maintaining employment levels. In this 
context a national incomes policy will be designed. ^° 

It is tempting, although premature and exaggerated, to see in the July 
1993 agreement the model of a national community. Premature because the 
new system was strained in the fall of 1994, and exaggerated because, as already 
argued, the bargaining power of imions was weak. However, the "Austrian" 
solution had come to Italy. 

As the large companies have been recovering from the recession and taking 
fresh shape, Enrico Cuccia's role has been significant once more . He attracted 
the magistrates' interest for his handling of the Ferruzzi collapse but nothing 
came of this inquiry. Cuccia benefited fi'om the extinction of DC-backed 
finance, from the recession, which has compelled companies to turn back to 



154 THE CRISIS OF THE ITALIAN STATE 

him, and from the privatization program. He has used these boons to outline 
a financial and industrial order that is recognizably his and is designed to enable 
northern Italian companies to survive in the world economy. 

The ills of the elite were not all the same. Ferruzzi suffered from Gardini's 
megalomania, family knavery, and too much diversification. Many of its 
component companies were solid, including Eridania Beghin-Say and Himont. 
Pirelli needed time to recover from its failed invasion of Germany. Salvatore 
Ligresti's property empire was tottering, while his dealings with ENI and with 
Craxi brought him a spell in prison in 1992. But here again Ligresti's insurance 
company, SAI, was solid. 

Fiat was hit by the international slump in demand for cars and exhibited 
the special fragility of Italian capitalism. Traditionally too dependent on the 
Italian market, its share of that market dropped from 60 percent to 40 percent 
over four years. In the first half of 1 993 its sales of cars declined by 1 1 .7 percent, 
while industrial vehicles plummeted 15.9 percent. Losses for the year ran to 
more than $1 billion and the prospect of future Japanese competition was 
ominous. 

With Cuccia's advice. Fiat devised a strategy that left it a family firm, but 
slightly less so. Meanwhile it obtained all the help it could from the Italian state, 
but became more independent of it. In September 1993 came the announce- 
ment that Gianni Agnelli and Romiti, who had been expected to retire, were 
staying on to reassure the markets. Into the shareholders pact came two 
newcomers, Alcatel and Deutsche Bank, while existing Italian partners, like 
Mediobanca itself and the Generali, reinforced their position. The reshuffle was 
important because, while Fiat remained a family firm, the family no longer ruled 
alone. On the board it had seven votes out of 1 1 , but nine were required for a 
majority. The entry of Alcatel and Deutsche Bank marked a strengthening of 
foreign alliances.^' 

Next Fiat announced a capital increase of $3.5 billion, the largest ever by 
an Italian company. Partof the money was to be put up by existing shareholders, 
but a large chunk came from the market. In a rather dubious maneuver 
Rinascente shares were offered to Fiat shareholders, while the holding 
company's financial arm, IFIL, launched a takeover of Rinascente. This meant 
that without being asked IFIL shareholders were pumping money into Fiat and 
being saddled with Rinascente (which is, however, in good health). 

Then in January 1994 Fiat announced plans to lay off 14,000 workers, 
6,000 permanendy and 8,000 because of the decline in demand. The Church 
criticized the company but Fiat responded that at its Melfi plant it was creating 
7,000 jobs directly and 4,000 more among its suppliers. With increasing 
unemployment and with an election at hand, the government had to intervene. 



February 1992 to March 1994 155 

The tripartite agreement provided a package of early retirement, solidarity 
contracts, and CIG, which protected most of the jobs. Some of the provisions 
looked feeble: the Arese plant in Milan was kept open to work on ecologically 
safer, primarily electrical, cars. Arese's chances of remaining open appear slight, 
while the Naples plant is to do nothing but process worn-out cars. Even in 
Turin, where jobs were saved at Mirafiori, Fiat looks less central. ^^ 

Of Fiat's 261,000 workers, 100,000 are employed outside Italy, especially 
in low-wage countries like Poland. Does this mean that Fiat is bent on 
abandoning Italy or on becoming a nomad multinational? Far from it. The 
Italian state has once more proved generous. Its share of the job-saving packet 
runs at about $100 million; it is putting up money for the electric cars and local 
authorities are likely buyers. Moreover total aid for Melfi is expected to come 
to more than $ 1 billion. Yet Fiat can respond that its investment program comes 
to around $7.5 billion. ^^ 

Luigi Luzzatti would have understood this cooperation between company 
and government. Combined with a strong, if less dominant family presence, it 
is the Italian way of confronting the world economy. The entry of Alcatel and 
Deutsche Bank will push Fiat toward greater internationalization, perhaps 
toward a joint venture or even a merger with Renault. Fiat's goal is to diminish 
its reliance on the Italian market by selling half of its new cars, the Puntos, 
abroad. Cogefar has been separated from the group, which is a signal — although 
not a proof — that illicit relations with the political class are to be discouraged. 

The Italian road toward internationalization is being mapped out by 
Enrico Cuccia, who stitched together the new Fiat shareholders pact. The 
disappearance of the DC could have brought the decline of Cuccia if, as 
countless Anglo-Saxons have observed,^^ he and the DC had complemented 
each other and worked together to prevent the emergence of a broader capital- 
ism. Cuccia's power may yet decline because forces pressing for an Anglo-Saxon 
system are strong, but this has not happened yet. As with Fiat it seems that 
Cuccia is helping strengthen Italy in a more open financial world. 

The end of the DC-PSI coalitions damaged the publicized economy and 
made possible the privatizations. Some companies, like the Nuovo Pignone, 
were sold to suitable bidders, in this case General Electric. Others, hke the 
Credito Italiano, were placed on the market, with a block of shares reserved for 
institutional investors and the rest for the general public. 

This provoked an enormous and misleading dispute that pitted Romano 
Prodi, the DC Left with which he is associated, the PDS, and most Anglo-Saxon 
commentators against Cuccia, the Milan-Turin families, and Giorgio La Malfa. 
The former group called for popular capitalism with the widest possible 
distribution of shares, while the latter preferred "hard cores" that would control 



156 THE CRISIS OF THE ITALIAN STATE 

the banks. Prodi tried to achieve his ends by restricting the number of shares 
that any group could buy in Credito or Comit to 3 percent. When the dust had 
settled, it was discovered that Cuccia had put together a web of interlocking 
companies that, by buying 10 to 1 5 percent of the shares, controlled the banks. ^^ 

Supporters of popular capitalism pointed out that in Italy only 6 percent 
of families owned shares, whereas in France the figure was 14 percent. They 
noted that only 5 percent of Italian companies were quoted on the stock market, 
while the French figure was 1 5 percent. However this was misleading because, 
while it would be advisable for Italy to have many more small shareholders, 
Credito and Comit had plenty. The government should take and has taken steps 
to encourage popular investment, such as pushing the Consob to improve the 
flow of information and passing the January 1992 law that regulates the Societk 
di Intermediazione Mobiliare or multifunctional investment firms. But small 
investors could not run Comit. 

Prodi was on safer ground when he spoke of creating more big companies 
and more merchant banks to resolve Italy's historic problem of having too many 
dwarfs and not enough giants. Of the world's 500 largest companies Britain has 
43 and Italy only 7. But to achieve the goal of strengthening Cuccia's rivals, 
Prodi should have had alternative bidders for Comit and Credito who repre- 
sented powerful financial interests. None emerged. In the Anglo-Saxon world 
such interests are frequently pension funds that entrust the companies, in which 
they hold blocks of shares, to professional managers. This system has its defects, 
but arguably it makes for greater financial power and a more intense search for 
profits. So the law of April 22, 1993, which sets up and regulates private pension 
programs, may be the most important move Italy has made toward widening 
its financial markets.^*' 

Here may be the future, alternative sources of power to Mediobanca. 
However Cuccia can hardly be blamed for taking control of Credito and Comit 
when no rivals challenged him. As for pension funds, Cuccia is busy tightening 
his links with the Generali and regaining control of Fondiaria. If insurance 
companies become even more important, then he will be ready. His aim in gaining 
control of Comit and staffing it with his proteges, such as Enrico Beneduce, the 
grandson of Alberto Beneduce, is to form a vast financial bloc that can play a role 
in world finance and in the new industries. Cuccia is watching the privatization 
of Stet, IRI's profitable telecommunications company.'^'' 

In forming his bloc he has foreign allies like the Deutsche Bank, Lazard 
Freres, Commerzbank, which bought into Comit, and Allianz, which bought 
into Credito Italiano. He continues to reach outside his traditional circle of 
friends to the medium-sized entrepreneurs like Luciano Benetton, Diego Delia 
Valle (of Tod's shoes), and Achille Maramotti (of Max Mara), whom he wishes 



February 1992 to March 1994 157 

to bring into Gemina, Credito, or Comit.^^ The sons of Romiti and Cefis work 
in Mediobanca. Is this merely another example of the tyranny of the family or 
a renewed attempt to create an establishment? 

Once more there is no need to overestimate Cuccia's importance, since 
the vast majority of Italian companies flourish outside his empire, or to create 
the counter-myth of Cuccia as a selfless patriot. In order to preserve the 
dominance of Mediobanca, Cuccia has limited the power of Fincomit, Comit's 
merchant bank, which is a potential rival. ^^ Prodi and the PDS were right to 
insert into the new privatization projects regulations that allow minority 
shareholders to be represented. The Lega is right to grumble that Cuccia pays 
scant attention to small business. But it remains true that Cuccia, the dirigist 
without a state, is using traditional methods to modernize Italian finance. 

His relationship with Prime Minister Berlusconi is intriguing. In what 
seemed the start of an alliance Mediobanca was asked to usher Mondadori onto 
the stock market, but in mid- 1994 the old coolness between the two very 
different men seemed to return. ^*^ 



THE 1994 ELECTIONS: A DEBATE ABOUT THE STATE 

Behind the intricate struggles among the political parties lay several visions of 
how the Italian state ought to work. To oversimplify, the doomed Centrists of 
the PPI-Patto Segni offered a clean version of the DC state mediating between 
the market and the populace. The left-wing Progressisti axed their entire 
campaign on a reform that would create a state that administers less and governs 
more; they also offered economic continuity with Ciampi. As already explained, 
the Lega sought to terminate the overworked state by forming an Italian union. 
Alleanza Nazionale (AN) called genetically for a stronger Italy. Forza Italia (FI) 
offered a neoliberal critique of the state combined with an appeal to entrepre- 
neurial creativity. Although all these projects were full of gaps and contradic- 
tions, all demanded an end to the overbearing state and the publicized economy. 
Moreover the electorate was offered a choice, albeit highly distorted, between 
the principal options of the Progressisti and FI. 

After a final flirt with the Lega in January 1994, Segni returned not to 
Martinazzoli's rebaptized Partito Popolare Italiano, but to an alliance with it. 
The Church blessed the PPI-Patto Segni formation, but its help was a shadow 
of its 1948 effort. The DC past and the new electoral system spelled doom for 
the Catholics. They retained only 53 percent of the people who had voted DC 
in 1992,^' while Segni suffered the extra humiliation of losing his Sassari 



158 THE CRISIS OF THE ITALIAN STATE 

constituency. The winner-take-all method squeezed the Centrists in a way all 
too familiar to Paddy Ashdown; with 1 5.7 percent of the votes, they gained 
approximately 7 percent of the seats. In Toni Bisaglia's Veneto they were left 
with four seats, the once white region with its small entrepreneurs going over 
to Forza Italia. In Remo Gaspari's Abruzzo the PPI-Patto was reduced to 15.4 
percent of the vote, while in Western Sicily it won only 14 percent, once more 
outdistanced by Forza Italia. 

This electoral result along with the virtual disappearance of the PSI 
marked the transformation of Italian politics. The postwar order had begun 
under Catholic rule and it was ending with Catholic defeat. Martinazzoli 
resigned and was replaced by Rocco Buttiglione. Cardinal Ruini did not resign. 
Paradoxically, in a time of recession, the Church's voluntary organizations are 
more valuable than ever . 

If the PPI's downfall was inevitable, the Left's defeat was more surprising. 
There was a spurious logic in the proposition that the crisis of the DC state 
would bring to power the DCs antagonist, the Progressisti. However if we 
accept that the 1993 triumphs were too easily won, then there is not much 
evidence of PDS or Progressisti strength. The PDS gained 4 percent more votes 
than in 1992 and remained the core of the Left. Its coalition partners were no 
great help. RC seemed to run its own campaign and Fausto Bertinotti played 
into the hands of the Right by calling for the taxation of government bonds and 
questioning NATO. At least RC existed and won 6 percent, whereas the Rete's 
1.9 percent must surely lead to its demise. Alleanza Democratica had lost its 
reason for existence when Segni spurned it, and Ottaviano Del Turco's Socialists 
barely survived Craxi's disgrace. In total the PDS's smaller alUes reached a mere 
8 percent. The Right-Left split — Rete and RC against AD and PSI — and the 
Verdi's solo performance meant that the Progressisti spoke with many voices. 
Left-wing fragmentation therefore survived the end of the Cold War. 

Another reason for the Left's defeat was the re-emergence of anti- 
Communism. In this supposedly de-ideologized age only the PDS had given 
up ideology. Silvio Berlusconi resorted to 1930s' language when he explained 
that he had entered politics to block a left-wing dictatorship. He offered this 
portrait of Massimo D'Alema: "He wore an unpleasant, threatening grimace. 
His thin moustache trembled with a hideous joy. I understood that he cared 
nothing for this country . . . nothing for the Italian family. "^^ That Berlusconi 
should use such language is understandable, but why did it work? 

One answer lies in the continuity between the new and the old — and even 
the older — regimes. Italian leaders from Mussolini to Craxi had disseminated 
anti-Communism. The PCI had ceased to exist only three years before and to 
many Italians Occhetto and D'Alema were tainted by their past. Moreover in 



February 1992 to March 1994 159 

the years 1993 to 1994 fear of chaos, inspired by the deteriorating economy 
and the disappearing elites, was at least as strong as the anger that had dominated 
in 1992 and 1993. Anti-Communism, which in a country that lacks the strong 
non-Communist, left-wing traditions present in France swiftly turned into 
hostility to the entire Left, offered security. 

More important, the regime crisis was caused by a state that had expanded 
into all areas of society. At least in Northern Italy the electorate wished to repulse 
and punish the invading state. FI and the Lega could be trusted to do this, 
whereas the Left could not. 

Herein lies a great irony. The PDS's program offers an excellent critique 
of the overbearing state. It diagnoses the real significance of corruption, which 
it defines as "a perverse mechanism that, on the one hand, has destroyed the 
state as regulator and guarantor of the general interest and, on the other, has 
strangled the forces of work and production. "^^ It gives priority to the recon- 
struction of the state, which must be an arbiter — just and efficient but modest. 
In its promised war on unemployment, the PDS would not use public works 
or expansion of demand, but would seek, for example, to help the private sector 
grow by developing financial markets. 

This is certainly the road Italy must take, but the PDS never succeeded 
in making its message credible. Its campaign was lackluster, partly because 
deficit reduction is not a theme that makes left-wing hearts beat faster. Occhetto 
spent much time reassuring the City of London and NATO, forgetting that 
British merchant bankers and Turkish colonels do not vote in Italian elections. 
Perhaps he had not lost the old PCI sense of illegitimacy. But the main reason 
for the Left's defeat was not its uninspired campaign, it was its inability to 
compete with Silvio Berlusconi's message. Both sides told the electorate that 
the state had failed them. The PDS offered to reform the state, Berlusconi 
offered also to substitute for it the dynamism of the entrepreneur. The PDS 
offered difficulty, whereas Berlusconi was optimistic. In the Italy of 1994 his 
message was more appealing. 

The red belt felt differently. In Emilia-Romagna the PDS alone gained 
more votes than the entire Right — 36.6 percent to 3 1.9 percent. The same was 
true of Tuscany where the Progressisti took 50.1 percent to the Right's 29.5 
percent. The Left had mixed results in the South, carrying Campania, where 
the PDS was the largest parry in Naples with 23 percent, but losing Puglia and 
also Sicily, where the anti-Mafia campaign did not carry over into the elections. 
Even more troubling to the Progressisti was the heavy defeat suffered in the 
"modern" regions of Lombardy and Piedmont. 

The PDS proved unable to convince the discontented supporters of the 
old regime, winning fewer than 15 percent of the 1992 PSI voters and a mere 



160 THE CRISIS OF THE ITALIAN STATE 

2.5 percent of DC voters. Its gain of roughly 4 percent seems to have come at 
the expense of its coalition partners: it won 16 percent of 1992 RC voters, 14 
percent of Verdi's, and 16 percent of Rete's. 

The result brought cries for Occhetto's resignation, which did not come 
until the European elections, when the PDS's share of the vote dropped 1 
percent, while FI's rose by 1 percent. The choice of Massimo D'Alema marked 
a shift of style, but the problems of the PDS remained: how to cease being an 
ex-Communist Party, whether to ally with the Catholics, and how to project 
convincingly its vision of the reformed state. The questions would re-emerge 
in the governmental crisis of December 1994. 

The MSI seemed an unlikely candidate for a major role in the new order. 
In the 1970s, when it achieved the 8.7 percent that so worried Berlinguer, it 
failed to capitalize on its success.^ Old dilemmas were exacerbated: it was still 
torn between its roles as a southern, conservative party and as a radical 
spokesman for popular protest in areas like the outskirts of Rome. It continued 
to resolve the contradiction by remaining a Fascist party. In the 1980s it 
changed in two ways, neither of them decisive. The calmer mood both of 
Italian politics and of the study of Fascism made the MSI less of a pariah. The 
first sign that it might be accepted as a legitimate party came in 1983, when 
Craxi declared that it was not unconstitutional and that he was ready to bargain 
with it. 

However, while this opened the door that had remained closed to Arturo 
Michelini, the MSI did not know how to respond. As the crisis of politics drew 
closer, the party felt that its Fascist identity was more valuable because it was 
the badge of its estrangement from the flagging DC-PSI system. So as before 
the MSI remained static, even when in the 1987 elections its vote dropped by 
nearly 1 percent to 5.9 percent. It ignored the obvious fact that Fascism was 
not seen by most of the electorate as a valid form of protest against, much less 
as an alternative to, the existing regime. 

At the Sorrento Congress of December 1987 Gianfranco Fini was elected 
as successor to the ailing Giorgio Almirante in the name of continuity. In 
Fascism "there is everything," stated Fini's congress motion. Fascism was not a 
period or creed to be consigned to history or to be viewed with nostalgia; it was 
both universal and Italian and it could renew itself without help from outside.^^ 

Decline continued: membership had dropped from 383,000 in 1984 to 
120,000 in 1987, while in the European elections of 1989 the MSI vote went 
down by 0.4 percent. This at last gave Pino Rauti his chance and he ousted Fini 
in January 1990. But Rauti's spell as Secretary proved that his brand of left-wing 
radicalism — anti-capitalist, anti-American, and in quest of an ideal commu- 
nity — could neither retain the MSI's conservative voters nor profit from the 



February 1992 to March 1994 161 

now evident crisis of politics. In the 1990 local elections the MSI's share of the 
vote fell to 4 percent and the next year Fini returned as Secretary. He threw the 
party behind Cossiga's attacks on the existing system and the notion of a 
presidential republic. Perhaps because of this Fini limited the party's losses: in 
1992 its share of the vote fell by only 0.5 percent. 

It is logical to deduce that the MSI's success in 1993 and 1994 stemmed 
primarily not from what it was or did, but from outside causes. Its long exclusion 
from government enabled it to benefit from the Clean Hands investigation, but 
the decisive factor was the collapse of the DC vote in the South. Next in 
importance was the legitimacy it derived from Berlusconi's statement, made 
between the two rounds of the Rome mayoral election, that he would vote for 
Fini. The process begun by Craxi was completed and Berlusconi then moved 
from endorsing the MSI to accepting it as a coalition partner: "There is no 
reason to discriminate against Alleanza Nazionale (AN) ... we are following its 
evolution with interest. "^^ 

This time the MSI leadership seized the opportunity. Fini understood the 
power that the DC had unwittingly bequeathed to him — "No one can do 
without us."^'' In the summer he had founded AN, which was a front organi- 
zation, not very different from organizations proposed by Michelini in the 
1950s and by Almirante in the 1970s. It was to be "a great center-right pole 
bringing together people from the MSI, from the Catholic party and from the 
lay parties."^^ But a more determined effort was made — at least superficially — 
to separate AN from Fascism, one spokesman comparing it implausibly with 
the historic Right that had governed Italy after Unification.^^ 

The all-important negotiations with Forza Italia were helped by the 
presence of Domenico Mennitti, who was among Berlusconi's advisors. As a 
member of the MSI, Mennitti had proposed in the 1987 Congress a reform 
that would have broken with Fascist continuity. Now Fini had moved far 
enough to proclaim that "Fascism is irrevocably consigned to history. We are 
post-Fascists. '"^^ Fini also performed well on TV, kept his distance from the 
nostalgic populism of Alessandra Mussolini, and ignored Rauti's sniping. 

He did not, however, steer his party through the painful self-scrutiny that 
Occhetto had imposed on the PCI. Fini waited until the election was won before 
asserting that Mussolini was the greatest Italian statesman of the century and 
that until 1938 Fascism had many positive features. Yet in MSI minds there is 
no contradiction between such statements and protestations of the party's 
commitment to democracy. Fini would admit a break with Fascism but not a 
complete denial of it, and he wanted the other parties to make a similar break 
with anti-Fascism. There may then be a national reconciliation, which is the 
way AN interprets the fiftieth anniversary of the liberation of Rome. 



162 THE CRISIS OF THE ITALIAN STATE 

As already argued, given Fini's strategy and its success, the strength of 
anti-Fascism in the country is questionable. The elements of continuity between 
AN and Mussolini's regime do not attract many voters, but nor do they deter 
as many as might be expected. However the loss of 1 percent in the European 
elections caused pardy by the foreign criticism of the "Fascist ministers" as well 
as the logic of his evolution made it likely that Fini would continue to move 
away from Mussolini toward some sort of Italian Gaullism. Electoral success 
and a role in the government would make this more palatable to the MSI base 
than it was in the 1970s or 1950s. This explains why Fini fought so hard to 
preserve the Berlusconi government in January 1995. His greatest fear is that 
AN will be sent back to the MSI's ghetto. In the run up to the January 1995 
congress it looks as if any schism will be small. 

Running against the Left and in favor of a break with the DC-PSI 
coalitions, AN performed well in the elections. It gained 13.5 percent of the 
vote with peaks of 27.5 percent in Puglia and 27 percent in Rome. The Roman 
bureaucracy was seeking protection in the new order and the defection to AN 
of a group of Christian Democrats, notably the Andreottian, Publio Fiori, who 
became Minister of Transport in the new government, was revealing. Through- 
out the South voters saw in AN a happy blend of protest and reassurance. An 
interclass cluster of shopkeepers, free professionals, and young unemployed 
voted for the continuation of the government's traditional role, which the DC 
could no longer guarantee. In Molise as in the Abruzzo, AN was the largest 
party. Nationally it gained 9.8 percent of the DCs 1992 electorate. 

If success in the South was predictable, AN performed relatively well in 
the more difficult Center-North. Running without FI support it achieved 5.9 
percent and 6.4 percent in two of the Lombardy colleges, while in red Emilia- 
Romagna and Tuscany its share reached 9 percent and 1 1 percent. Here Fini's 
success in projecting a TV image of responsibility may have been important. 

AN talks a great deal about the need for a strong state. Law and order and 
anti-Communism are leitmotifs. In the 1980s it ran a campaign for the 
reintroduction of the death penalty. Fini has called for a reassertion of Italy in 
Europe by citing Italian claims on the former Yugoslavia and condemned the 
Maastricht agreement as "a match that cannot be won.'"" However AN's 
residual illegitimacy tends to weaken any government in which it participates. 
Similarly, it accepts the privatization program — even if Rauti has declared that 
"talk of the free market makes me reach for a machine gun'"*^ — but its southern 
base makes it support interventionism with the attendant danger of clientelism. 

The key to the Right's success was not the Lega nor AN, but the 
movement that brought them together in the Freedom Pole: Forza Italia, its 
creator Silvio Berlusconi, and his company, Fininvest. FI is a complex phe- 



February 1992 to March 1994 163 

nomenon and should not be explained away too simply. Berlusconi does not 
owe his victory solely to TV. Certainly he could not have won without the TV 
blitz he launched in January 1994, but he initiated his political activity in the 
late spring of 1 993, while in his TV commercials and appearances the medium 
was not the sole message. Nor is the "Berlusconi phenomenon" an example of 
naked economic power replacing political power because Fininvest is a special 
and untypical company, better suited than most others to run a political 
operation. My thesis is, first, that Forza Italia is a particular kind of populism 
that emerged from a country rich in — or burdened with — many brands of 
populism, and that suited the historical moment of 1994. Second, FI is an 
ambiguous movement that reopens the debate about the overlap between state 
and market. 

One more characteristic of any populist movement is its charismatic 
leader. In a country where businessmen are also celebrities, Berlusconi had the 
advantage of being involved in two newsworthy activities, soccer and TV. It 
was his good fortune that as he advanced toward becoming Prime Minister, his 
team AC Milan was marching to victory in both the Italian championship and 
the European Champions Cup. In England soccer is labeled working-class, 
whereas in Italy it is followed by all social classes. AC Milan brought Berlusconi 
not merely mass enthusiasm but an aura of patriotism, which he exploited in 
the name he gave his movement. Forza Italia, or "Let's go Italy," is chanted at 
international soccer matches. Meanwhile his ownership of three TV stations 
offered him free publicity as well as the endorsement of his popular performers 
like quizmaster Mike Buongiorno. In a period when politics as spectacle was 
important, the creator of spectacles had an advantage. 

Another advantage Berlusconi enjoyed over other businessmen was that 
he had created, not inherited, his empire. He was not a friend of Cuccia and he 
spoke of the "rarefied air" of the Employers Association.'^^ Much of his money 
came from selling TV time to small businesses and he was able to empathize 
with their owners. Indeed he had long depicted his networks as the voice of the 
people: "I think we can be against the TV of the palaces of power ... we can 
be a positive TV . . . one with which people can feel at home."'^^ 

The linking of "people" with "positive" implies an optimism that was 
facile but answered the worries of the electorate. Of course, Berlusconi was not 
ideally suited to his new role. Fininvest's debts hardly seemed to qualify him to 
take charge of the vast national debt. More important, he was identified with 
the old regime as a member of the Craxi clan who had been tainted during the 
Clean Hands investigation. His opponents were quick to suggest that he had 
entered politics to gain control over the state-owned banks to which he owed 
money and over the magistrates who were harassing him. 



164 THE CRISIS OF THE ITALIAN STATE 

Although he was an integral part of the publicized economy, Berlusconi 
had another side to him. He was the plucky David who challenged the Goliath 
of state TY. He had dared to start up commercial television in the late 1970s 
when the PCI supposedly exercised hegemony and his networks did not merely 
sell goods but spread the values of the market economy such as "freedom, 
individualism and meritocracy.'"^^ 

So at a moment when the state was struggling and the politicians were 
discredited, people looked for a savior. One may make the comparison with the 
period after July 25, 1 943. Then Italians turned to the Pope, "the man in white," 
the "angelic pastor." That they should now turn to an entrepreneur who 
specialized in consumer goods would have seemed to Pasolini definitive proof 
that his nightmarish vision of modernity had come true. But in fact, while 
projecting the image of the modern manager, Berlusconi appealed to such 
robust Italian traditions as distrust of the state, anti-Communism, and the 
family firm. He harked back to the postwar economic miracle and promised to 
repeat it. He would create a million jobs: the round number seemed more like 
a parable than an item of economic policy. 

Already we see the ambiguity of his victory. Since he still owned his TV 
networks, his publishing companies Mondadori and Silvio Berlusconi editions, 
magazines like Panorama and the newspaper, // Giomale, he worsened the 
overlap that helped bring about the 1992 crisis. Significantly one of his many 
lawyers was defeated in his bid to become regional president of Sardinia in June 
1994. The wary voters suspected that Berlusconi, the construction tycoon, had 
designs on their coastline. 

The opposite interpretation is that Berlusconi was not Craxi's successor and 
that he understood the need to reform the state. Populism is frequently a way of 
appealing to a particular segment of the electorate that feels itself neglected. 
Berlusconi sought the support of the small- and medium-sized entrepreneurs of 
Northern Italy and, more generally, of the urban, educated middle class. FI's 
Program speaks of removing "the bureaucratic muddles and the innumerable 
obstacles which prevent the creation of wealth. """^ The Thatcherite language is 
characteristic of his manner. Berlusconi wanted to cut back the welfare state and 
reduce taxes on individuals and companies. He went part of the way with the Lega 
in calling for the transfer of power to the regions. However it is unclear from the 
program whether Berlusconi appreciated that the market requires rules and that 
only a modest but strong state can provide them. 

Another trait of populism is its use of a simple, frequendy emotive 
language that appeals to the people over the heads of the elites. As his onslaught 
on D'Alema demonstrates, Berlusconi is passionately anti-Communist. If the 
people are to be defined as good, there must be an evil villain whom they defeat 



February 1992 to March 1994 165 

before they enter the promised land. However emotional outbursts were fairly 
rare in Berlusconi's public appearances because he was vying with Bossi for the 
right-wing vote. He left slang, invective, and sexual allusions to his rival and 
used the language of calm reason: moderation and balance 2xe terms that recur 
in his speeches.^'' 

Still more frequent is the verb "to organize." Berlusconi made few 
references to technology, which is a theme ill-suited to populism, but he pitted 
the order of the business world against the chaos and ideology of politics. 
Implicit was the contrast between the state services and the private sector. 
Organization was never dull or mechanical, but was associated with creativity, 
which was the mark of the entrepreneur. 

Fininvest's creativity produced the political movement Forza Italia. Three 
branches of the holding company were especially important. Publitalia, which 
sells TV time, used its contacts all across Italy to win the support of local business 
leaders, to set up Forza Italia clubs, and to find candidates. Programma Italia, 
a financial firm, worked through the broader circle of its investment cUents to 
set up clubs and generate an electoral base. Diakron conducted public opinion 
polls to discover the issues that most troubled the electorate. Fininvest's TV 
journalists tested the potential candidates and trained the best of them in public 
speaking and TV performance.^^ 

Tensions emerged in the FI clubs. Clubs were formed by ex-Socialists and 
ex-Christian Democrats looking to disguise their pasts. In Sicily there were fears 
of Mafia infiltration. Conversely club members resented the weight of Fininvest 
and the way Publitalia, led by Marcello dell'Utri, reserved safe seats for its own 
managers. In some cities, such as Bologna, Publitalia and Programma Italia were 
at each other's throats. No one, not even Berlusconi, knew how many clubs or 
members there were. In February FI claimed there were 10,000 clubs and 1 
million members, which was less a statement of fact than a boast. 

One aspect of these maneuvers concerns us. Berlusconi had not decided 
what he wanted FI to be. Certainly it could not and should not become a 
traditional party apparatus, bureaucratic and bent on extending its power over 
civil society. But should it be merely an electoral machine, while political power 
was reserved for Berlusconi? This would lead to plebiscitary democracy, to the 
charismatic leader who instinctively understands and interprets the desires of 
"his" people. Or it would lead just as easily to the usurpation of power by the 
new super-clan of Fininvest. Alternatively FI could become the transmission 
belt between civil society and the government, whose decisions it would 
influence. It could be the Center-Right, modern capitalist party that Italy has 
never had. This was, in essence, the issue that underlay the seven-month 
Berlusconi government. 



Clan Rule 



Forza Italia emerged from the elections as the largest party, with 21 percent 
of the vote. In the industrialized, modern northwest it gained 25.7 percent, 
which was more than the PDS and RC together. It swept Sicily, eclipsed the 
PPI in the Veneto, and trounced the Lega in Milan by 28.6 percent to 16 
percent. It demonstrated its appeal to the working class by winning the 
Lingotto-Mirafiori constituency in south Turin, where many Fiat workers lived 
and where the PDS's candidate was the secretary of its Turin federation. FI 
pulverized its opponents among young voters, winning 39.6 percent of those 
under the age of 25. It drew voters from the old and new parties: it gained 25.8 
percent of DC voters and nearly 15 percent of PSI voters; it also seduced 18.6 
percent of Lega voters and, had the two parties not formed an electoral alliance, 
that figure would surely have been higher. 

As it was, the Lega with a mere 8.4 percent of the vote won 1 22 seats and 
was the largest component in the Freedom Pole's House group. FI had 95 seats 
and AN 109. With a total of 266 seats the pole had an outright majority over 
the Left, which had 202 seats, and the Center, which won 46 seats. In the senate 
the pole had only a relative majority: 1 5 1 seats to the Left's 1 22 and the Center's 
31.' So the British system of voting, accompanied by the residual 25 percent 
proportional representation, had not functioned perfecdy, but it had produced 
a dominant coalition. However, the question of the coalition's internal consis- 
tency remained. 

On May 1 1 , after a surprisingly long period of preparation, Berlusconi 
presented his government. It was surprising because such tardiness was character- 
istic of the old regime, with which Berlusconi was ostentatiously breaking, and 



168 THE CRISIS OF THE ITALIAN STATE 

because the delay stemmed from the same familiar causes, namely, the battle 
among the coalition partners for jobs. Yet Italy's first "new" government was 
unlike its predecessors. As already argued, the Amato and Ciampi governments 
had marked a break because they had functioned without the safety net of DC 
domination, PCI exclusion, and PR. But they had been merely temporary 
governments of transition, whereas the Berlusconi government possessed the 
legitimacy of having been elected under the British system that allowed the voters 
to make a more direct choice. Two further innovations were the preeminence of 
the Prime Minister and the lack of a hegemonic party. So the government 
possessed various kinds of strength along with a clear vulnerability. 

Five ministries went to AN, including the Ministry of Agriculture, the 
source of so much DC clientelism. That the environment was given to Altero 
Matteoli, who had run the MSI organization and who liked hunters and motor- 
ways, indicated where the new government's priorities did not lie. Giuseppe 
Tatarella became both Minister of the Post, a position that oversees television, 
and deputy Prime Minister. President Scalfaro insisted that the AN ministers not 
have participated directly in the Salo Republic, but their presence still caused an 
international backlash as some of their foreign counterparts refused to meet them. 

The Lega gained the important post of the Ministry of the Interior, which 
oversees much of the regional government apparatus. It also obtained the 
Ministry of Industry, which Vito Gnutti could use to help small companies. 
However the Lega was both within and without the government. As Minister 
of the Interior, Roberto Maroni incarnated the responsible party that under- 
stood the need to compromise, while Umberto Bossi roamed free and demon- 
strated the Lega's purity by attacking FI and AN. 

The choice of Lamberto Dini, a high official in the Bank of Italy, as 
Treasury Minister demonstrated that Berlusconi understood the need to offer 
the international financial markets a reassuring symbol. From symbol to reality 
the road would be long. Berlusconi brought into the government his Fininvest 
loyalists, by one count ten in all.^ The most important was Cesare Previti, a 
lawyer who was initially destined for the Ministry of Justice (an amazing idea!) 
but was switched to Defense, a post that he combined from October on with 
the job of leading FI. Berlusconi installed a non-Fininvest lawyer, Domenico 
Contestabile, as Undersecretary of Justice, but he gave the sensitive post of 
Undersecretary to the Prime Minister to Gianni Letta, who had been in charge 
of government relations for Fininvest. Another sensitive position, the Ministry 
for Relations with Parliament, went to Giuliano Ferrara, a regular performer 
on Berlusconi's TV networks and a man not renowned for his tact. Publitalia 
had its own voices in the government: the Undersecretaries for the Interior and 
for Transport, Domenico Lo Jucco and Gianfranco Micciche. 



Clan Rule 169 

Although Fininvest had introduced into the campaign both marketing 
techniques and the myth of management's ability to solve all problems, and 
although entrepreneurs and managers made up 51 percent of its parliamentary 
group, it made no attempt to adapt business methods to government. Indeed 
Berlusconi complained that he could not impose his decisions on the govern- 
ment as he had done in his entrepreneurial career, but had to spend his days 
mediating. There was a paradoxical contrast between the image of a charismatic 
leader and a government that demonstrated that it was weak rather than 
authoritarian in the key areas of justice and the economy. This weakness sprang 
from two main sources. The first was that FI turned out to be a clan rather than 
an agent of reform, which was the real significance of the Fininvest contingent. 
The second was that Berlusconi had no party to rally support behind him once 
his charisma was tarnished. 

Examples of the first weakness were the enduring conflicts between the 
owner of Fininvest and the Prime Minister. A company as large as Fininvest 
was affected by a battery of government decisions. Did the Prime Minister wish 
to cut state pensions? It could be argued that this favored the private pension 
funds run by Fininvest. If the budget increased taxes on the co-ops, then Standa 
could only benefit. Moreover Berlusconi sharpened the conflicts through his 
purge of state television and his war on the Milan magistrates. 

Weakened by these troubles, he was unable — as well as unwilling — to 
conduct a policy of economic austerity. Caught between the financial markets 
and grassroots protest, he found that his lack of a majority in the Senate 
and — more importantly — his dependence on the Lega in the House made him 
an easy target. The confident narcissism of the campaign was strained: 
Berlusconi's allusions to himself as Christ carrying his cross grew more frequent 
and Bossi was transformed into Judas.^ Then, when his governing coalition fell 
apart, the charismatic leader appealed over the head of parliament to "his" 
people. 

This merely masked the reality that the problem of the Italian state had 
not been solved. The Berlusconi government was unable to act as arbiter. Its 
budget was criticized as class-based in that the pension cuts fell most heavily on 
the working class and were not balanced by sacrifices from the self-employed.'^ 
But even this might have been accepted from a genuinely strong government 
that was less obviously using public resources to serve private ends. The 
campaigns conducted to silence the magistrates and to purge state television 
took away the government's prestige. 

Not that the other political actors were blameless. Perhaps it was inevitable 
that the Left paid lip service to reducing the public debt while it whittled away 
the budget cuts. The PPI flirted shamelessly with Right and Left alike. Alleanza 



170 THE CRISIS OF THE ITALIAN STATE 

Nazionale obstructed the separation of state and market by slowing down the 
privatizations and by trying to extend the power of the parties over the Bank of 
Italy. This was more serious as it hampered the reform movement begun in 
1992. The parties had not completed the task of reforming themselves. The 
Lega had not made the transition from a protest movement to a partner in 
government. Most serious of all, FI remained a virtual party, devoid of organi- 
zation and of goals. Berlusconi opted to keep it powerless. These were the parties 
of a political system in transition. 

Alternatively it is tempting to see in their behavior the triumph of 
change-without-change. A new alliance was taking shape between the Northern 
small- and medium-sized industrialists, who benefited from the income tax 
amnesty and voted Forza Italia or Lega, and the South, which relied on AN to 
keep public money flowing. Yet the impulse to reform the state was present in 
the protest against the decree of July 1 3, 1 994, as well as in the confused attempt 
by both the unions and the Employers Association to maintain the agreement 
of July 1993. 

The Berlusconi government's record is not, however, entirely unimpres- 
sive. Lamberto Dini began to reduce state ownership of the savings banks by 
prodding them to put 50 percent of their capital on the market. The privatiza- 
tion program made some progress: SME's supermarket chain was sold off, as 
was a half share in the Istituto Nazionale delle Assicurazioni (INA). The Finance 
Minister, Giulio Tremonti, launched a plan to simplify the income tax system, 
which represents the best chance of combating evasion. Fresh blows were struck 
at the Mafia. In general, however, citizenship did not flourish between May and 
December 1994. The Berlusconi government cannot be considered to have 
advanced the reform of the state, even if it may represent a pseudo-solution that 
Italy could not but try out. Clans and populism were rooted in Italian history; 
they were bound to re-emerge during a crisis. We certainly have not, even now, 
seen the last of Berlusconi. 



POLICY: BATTLING THE MAGISTRATES NOT THE DEFICIT 

The government's first economic measures blended coherence with facility. Tax 
cuts were off^ered to employers who were young, who were starting up for the 
first time, who reinvested their profits, and above all who hired new workers. 
The last group received a tax credit equal to 25 percent of the starting salary of 
each new employee. Labor law was changed very slightly to make it easier for 
small business to hire, although nothing was done to promote temporary or 



Clan Rule 171 

part-time employment.^ Nor was it clear how the tax cuts were to be financed, 
which was an example of Berlusconi's conviction that confidence could be a 
substitute for thrift. 

In foreign policy national assertiveness found expression in the demand 
that Slovenia setdc its differences with Italy before it could apply for EU 
membership. Inevitably Slovenia responded with allusions to Mussolini's inva- 
sion, which were embarrassing to a government with AN ministers.^ 

On June 12 the electorate demonstrated its desire to be governed by 
Berlusconi when it increased FI's share of the vote to 30.6 percent in the 
European elections. This huge jump not only forced Occhetto's resignation but 
it awakened in Berlusconi the dream of triumphant fall elections and of a 
coalition without the meddlesome Bossi, whose Lega lost 20 percent of its vote. 

In retrospect it is clear that such dreams were one reason why Berlusconi 
squandered the opportunity to use his popularity in order to push through an 
early, tough budget. Another reason was his desire to seduce the electorate rather 
than to convince it of the need for sacrifices. During the election campaign he 
had proclaimed that higher taxes were unnecessary, thus flattering the voters 
and indirectly benefiting his own Fininvest, a company dependent on domestic 
consumer spending, but relatively unaffected by the state of the lira. Berlusconi, 
hostile to the Bank of Italy because his predecessor, Ciampi, had been its 
president, simply underestimated the speed and the force with which financial 
markets would react. However, it is hard not to conclude that Berlusconi gave 
priority to clan interests. 

Thus he postponed financial measures until the fall, although the Con- 
stitutional Court still managed to add approximately $15 billion to the debt 
through a retrospective decision about pension rights. The markets took note 
and were further alarmed by a squabble between the government and the Bank 
of Italy over Dini's successor. Berlusconi blocked the nomination of Tommaso 
Padoa Schioppa, whom he considered a Ciampi protege. This was interpreted 
by the markets as an attempt to interfere with the bank's independence, which 
was the very last thing that foreign financiers — perhaps naively — expected of a 
government of businessmen. 

Two months after Berlusconi had taken office the lira had declined by 4.2 
percent against the mark, while the stock market — in part for reasons uncon- 
nected with Italy — had lost 7.7 percent of its worth. Banks began to raise their 
interest rates and foreigners started to withdraw their money. In the second 
quarter of 1994 there was a negative capital flow of $14 billion.'' Berlusconi 
made a proposal to cut the 1995 deficit by $29 billion without, however, saying 
what was to be cut or how fresh revenues were to be raised.^ On August 1 1, in 
order to protect the lira, the Bank of Italy raised the discount rate by 0.5 percent. 



172 THE CRISIS OF THE ITALIAN STATE 

This provoked fresh accusations from the governing coalition about a 
supposed plot, in which Ciampi, the bank, foreign financiers, and even 
American Jews allegedly were active. The attacks on the bank were led by AN. 
The issue of Dini's successor was allowed to drag on until October, when a 
compromise candidate, Vincenzo Desario, was appointed. Meanwhile AN 
spokesmen kept up their sniping in a bid to gain greater control over the bank. 
One of their proposals was that the Governor be appointed for a fixed period 
rather than for life.' 

This went directly against the thrust of reform, which had sought to 
resolve the twin problems of the overworked state and the publicized economy. 
The same may be said of the government's campaign against public television. 
One of the indirect consequences of the Clean Hands operation had been an 
attempt to diminish political interference with television. Under the old regime 
the three main channels were "owned" by the DC, the PSI, and the PCI-PDS 
respectively and their nightly news bulletins reflected this. A new team, led by 
Claudio Dematt^ and Gianni Locatelli, had been installed to clean up these 
audiovisual Augean stables as well as to cut costs. 

However on June 30 the government forced both men to resign and 
installed as the public television supremo Letizia Moratti, whose family had 
ties with Berlusconi. An attempt to create balance was made when Alfio 
Marchini, whose father had had close ties to the PCI, was also named to the 
governing board. As an entrepreneur Berlusconi had always felt that the state 
television had an unfair advantage over his channels because it received, via 
the government, the money people paid for their TV licenses. Now he could 
try to cut state television's budget, which was indeed bloated. In turn this 
would reduce the service offered and make it more difficult for state television 
to sell its advertising slots. Naturally extra money would flow into the Fininvest 
coffers. 

As a politician Berlusconi was concerned about the political slant of the 
news broadcasts and of the talk shows on state television. In September Moratti 
changed the heads of the three networks and also the people in charge of the 
news broadcasts. She appointed as the heads of Channel 1 and 2 news a man 
who had worked for Fininvest and was regarded as close to AN and a man who 
was thought to be a follower of Craxi before he went over to Berlusconi. '° 
Channel 3 was allowed to remain in opposition, with left-wingers in charge of 
the news and the network. However the new network head, the well-respected 
Sergio Zavoli, turned the job down, fearing that Channel 3 would be gutted. 

The battle over state TV, which saw the resignation of Alfio Marchini, 
took up enormous space in the media. One doubts, however, whether the 
average Italian cared: TV had always been politicized and only the bias was 



Clan Rule 173 

being altered. Even that was not certain. Berlusconi continued to complain 
bitterly about the antigovernmental prejudice in the news coverage and Channel 
3 was alive and well when he left office. The key issue is not that Berlusconi 
succeeded in taking over or in crippling state TV, but that the governmental 
coalition spent so much time trying to do so. One consequence was the damage 
done to relations with the Lega, which felt that it had lost out in the struggle 
to place supporters in key positions. 

Of greater moment was the war between the government and the magis- 
trates. Relations were tense from the start, if only because Forza Italia contained 
so many lawyers accustomed to defending clients against prosecuting magis- 
trates. But the real issue was Fininvest's role in corruption and how much 
Berlusconi knew of it. Here the government showed none of the sloth it revealed 
in dealing with the economy. Cesare Previti spoke frankly of wishing to win the 
magistrates over to the government. Alfredo Biondi had to be more reticent but 
he suggested separating the investigating magistrates from the rest of the corps, 
which raised the suspicion that he thought they would be more easily controlled 
if they were isolated. ' ' 

On July 13, while Italy was playing Bulgaria in thesemifinalof the World 
Cup, the government issued a decree that allowed De Lorenzo, Diulio 
Poggiolini's wife, and hundreds of others jailed in the Clean Hands operation 
to leave prison. It also limited to three months the length of time the magistrates 
could investigate a suspect without informing her or him, and it banned 
newspaper coverage until the decision to put the suspect on trial. 

Like the Amato decree, Biondi's initiative provoked a flood of protest that 
was in no way mollified by Italy's victory over Bulgaria and that reached its 
climax before the heartbreaking loss to Brazil in the final. In a new form of the 
"everybody-in-the-piazza" syndrome, newspapers and radio stations were bom- 
barded with fax messages denouncing the decree. One poll showed that 83 
percentof those contacted were opposed.'^ On July 14 the Milan Pool resigned 
and Antonio Di Pietro read their statement on TV. 

It was a moment when Berlusconi's emphasis on the media was used 
against him. Di Pietro's blazing emotion was felt by the viewers to be authentic 
and the "cool" men of the Fininvest networks were unable to counter the impact 
he made. One might speculate that the collapse of political structures in Italy 
has left space for three charismatic figures — Berlusconi, Bossi, and Di Pietro. 
They are very different in their personalities and in their roles but their clashes 
have been key scenes in the drama of the 1994 government. After his TV 
performance Di Pietro was hailed as the voice of a peasant Italy that had survived 
the economic transformation. He was "an emigrant from Molise," broad- 
shouldered and hardheaded but "gentle."'^ 



174 THE CRISIS OF THE ITALIAN STATE 

Berlusconi took a tough stand on July 14 and capitulated on July 1 9. The 
decree was withdrawn but the war went on. The Milan Pool continued its 
investigation into the bribes offered by, or exacted from, companies whose tax 
records were being examined. Prominent among firms that had bribed the tax 
police was Fininvest and on July 26 a warrant was issued for the arrest of Paolo 
Berlusconi, who had authorized the payments. 

Two days before this, a meeting was held at Arcore, Silvio Berlusconi's 
mansion outside Milan. Present along with the Prime Minister were two other 
members of the government, one of whom was Previti. The acting president of 
Fininvest, Fedele Confalonieri, and the lawyers of the accused executives also 
took part. Nothing could better symbolize Berlusconi's lack of any sense of the 
state's role as arbiter and the way he confused the private and public spheres. 

Although the conflict between the owner of Fininvest and the Prime 
Minister was now apparent, Berlusconi did little to resolve it. Perhaps there was 
not much he could do. Fiad he so wished, he could not have sold such a large and 
diverse holding company. Divesting himself of bits and taking some companies 
onto the stock market were at best palliatives. To buy time Berlusconi had set up 
a committee of three wise men to study possible solutions and on October 8 they 
recommended a blind trust. But this made little sense since the Prime Minister 
and all his government knew what the activities of Fininvest were. 

Meanwhile the Clean Hands investigation drew ever closer. On Septem- 
ber 3 Di Pietro had suggested a political solution: companies that had paid 
bribes would be given three months to confess and provide information; in 
return for their cooperation they would be immune from criminal prosecution. 
Ironically this would have suited all businessmen except Berlusconi, who could 
hardly avail himself of such an opportunity after protesting his innocence so 
volubly. 

On October 5 Francesco Borrelli, the head of the Pool, made the oblique 
statement that "we are drawing close to the highest levels of finance and 
politics."''^ This was widely interpreted as meaning that Berlusconi would be 
charged and Borelli was widely condemned for issuing a threat. Berlusconi 
retaliated by asking the CSM to discipline him, but, although the Council 
discussed the case, it took no action. 

Borrelli's unwise statement reflected the pressure under which the mag- 
istrates were working. They were vulnerable because they had used preventive 
detention in ways that went beyond the intent of the law. It was legitimate to 
feel that the balance between the claims of society and the rights of the accused 
had swung too far against the latter. Moreover, whether they sought it or not, 
the magistrates had acquired political power because, as I have argued through- 
out, clientelism was less a matter of individual morality than a pillar of the 



Clan Rule 175 

postwar order. So now the Milan Pool was generally supported by the PDS and, 
albeit more discreetly, by AN, because these parties had stood largely outside 
that system. 

As rumors that Berlusconi would be charged grew ever more frequent, the 
war grew more ferocious. Charges were made that Di Pietro had mishandled 
evidence and he was investigated. In November Biondi dispatched inspectors 
to the Milan office, which was interpreted as an attempt to discredit the Pool. 
In a dangerous development the war spread to Sicily and to the anti-Mafia 
campaign. Defenders of the rights of the accused argued that the Mafiosi who 
turned state's evidence were treated too favorably and the imprisoned Mafia 
chieftains too harshly.'^ 

The anti-Mafia struggle continued under the Berlusconi government. In 
September Antonio Cava was arrested on charges of collaborating with the 
Camorra, while the investigation into Andreotti's ties with the Mafia went ahead. 
Nitto Santapaola's deputy was arrested and decided to tell all he knew about the 
Catania crime family. In Palermo Michelangelo La Barbera was arrested and 
accused of helping to organize the murders of Falcone and Borsellino. 

Yet the fears that the campaign against organized crime would be damaged 
by the government's war with the magistrates persisted. They were expressed 
forcibly by Giancarlo Caselli, the head of the Palermo Pool,"^ who once more 
drew attention to the parallels between the language that Berlusconi's supporters 
used to attack the magistrates and the anathemas uttered by Toto Riina. 
Moreover the charges that FI and AN candidates in Sicily had, knowingly or 
not, received help from the Corleonesi, were revived in January 1995 when 
Riina's financial advisor was arrested.'^ 

On November 22 the long-awaited letter from the Milan Pool was 
delivered to the Prime Minister. It was severe in that it did not merely notify 
him that he was being investigated but also summoned him to appear with his 
lawyer before the magistrates. Berlusconi had already declared that he would 
not resign and he won sympathy because the news was leaked in advance to the 
press and because the letter was delivered while he was hosting an international 
conference on crime in Naples. 

Previti was characteristically blunt: "a Prime Minister should not be 
interrogated."'^ Berlusconi was slightly more subtle but he made it clear that 
he considered the accusations against him not merely groundless but politically 
motivated. In a logical but dangerous extension of his populist worldview he 
began to claim both that the magistrates had no authority over him because 
they had not been elected and that parliament could not overthrow him because 
the voters had chosen him to lead the country. Using his religious language, he 
declared the people's representatives to be "anointed by the Lord."" 



176 THE CRISIS OF THE ITALIAN STATE 

Behind such extravagances a troubled Berlusconi could not hide the fear 
that he, the creator of spectacles, was now unsure of the type or reality of the 
image he was projecting. He felt that he had become both Jekyll and Hyde. 
This modern entrepreneur sounded like a caricature of the traditional Italian 
male — like a character from an Alberto Sordi film — when he swore on the heads 
of his children that he was innocent. Meanwhile AC Milan had started to lose 
matches. ^'^ 

The Prime Minister fought back. Ferrara and the other hired guns kept 
blazing away at the magistrates. An appeals court decision transferred the first 
of the tax police cases from Milan to Brescia. To transfer political cases to small 
towns that had fewer and less experienced magistrates had been a tactic of the 
old regime. Amid a storm of protest, the judge who had made the decision 
resigned and was hailed by the Berlusconi camp as a martyr. 

Then on December 6 Antonio Di Pietro resigned. He explained that his 
work and he himself had become so politicized that he felt unable to perform 
his duties as a magistrate. At this time we can only speculate about his other 
motives, but a profound weariness with the entire situation must have played a 
part. The hired guns blamed tensions within the Milan Pool and sought to 
annex Di Pietro as a chief martyr. The resignation was a political victory for 
Berlusconi in that it deprived the Pool of the member who was best able to gain 
the support of public opinion. Borrelli came from the traditional Milan 
bourgeoisie and Gherardo Colombo was an intellectual, but Di Pietro belonged 
"body and soul to a peasant culture which is alien to our ignorant urbanized 
country."'^' He too was a man of tradition and a man who could be draped in 
the mantle of a very different populism. His sayings were much quoted: "Idle 
chatter is carried on the wind but documents sing."'^^ Di Pietro will surely be 
heard from again. 

Berlusconi appeared before the magistrates on December 13. It was the 
first time in postwar Italy that a Prime Minister had undergone such a 
humiliation, which reflected the change in the country. On two occasions 
Andreotti had been summoned before the magistrates while he was Prime 
Minister and each time he had evaded them.^^ Berlusconi remained in the Milan 
law offices for seven hours and he left without giving the promised press 
conference. The media master was unable to project any image at all. He 
recovered, though, and struck back using videos, his TV networks, and — for 
the first time — street demonstrations. 

It is probable that the magistrates questioned him chiefly about an attempt 
to cover up a bribe paid by Fininvest to the tax police. But there were also the 
issues of how much Berlusconi knew of the Swiss payment in the Gigi Lentini 
transfer, of Publitalia's alleged creation of secret funds to pay bribes, and of 



Clan Rule 177 

whether Berlusconi owned more than the 10 percent to which he was Umited 
by law of the pay- TV company Telepiu. 

To his supporters it was quite simply clan warfare: "We're going to the 
mattresses . . . everyone against everyone else" (Domenico Contestabile); 
"there's a general war, the magistrates have joined in, it's everybody fighting 
everybody" (Marcello Dell'Utri)."^ Berlusconi's strategy was fixed. He was not 
going to resign even if, as he expected, the magistrates sent him to trial. Elected 
by the people to lead Italy, he could not be deposed without fresh elections. His 
roles as savior of the nation and as clan chieftain were complementary in that 
both excluded his role as Prime Minister in a parliamentary democracy. 

Throughout the fall the possibility that Berlusconi would be arrested had 
hung over the financial markets, depressing the lira and government bonds. The 
traditional contradiction of the Italian economy had returned. Spurred by a lira 
that in the lifetime of the Berlusconi government lost 10 percent of its value 
against the mark, Italian exports soared. Fiat's sales in Europe were 28 percent 
higher than a year earlier, while the small companies throve and modernized, 
lowering their distribution costs. ■^^ However Italian government bonds had to 
offer yields 4.5 percent higher than German bonds^*" and the debt hovered 
around 120 percent of GDP. 

In 1992 and 1993 government spending would have been in the black 
without interest payments, so it was vital not only to make cuts but to be seen 
making them. Only a demonstration of government resolve in imposing 
austerity would convince investors to keep lira and buy treasury bonds, which 
would in turn reduce interest rates and the deficit. World time in the shape of 
free movement of capital was pressing on Italy. Without the capital controls, 
which the EU had eliminated, the old contradiction between a dynamic 
industry and a wasteful public finance had become untenable. A display of 
austerity was essential. 

Much hung on the budget that had to atone for the missed opportunity 
before the summer. Yet Berlusconi remained bound by his promise not to 
increase taxes, by his view that Italy could expand its way out of its problems, 
and by his desire to break with Ciampi's methods. To this must be added the 
objective weakness created by Fininvest's legal problems and the consequent 
reluctance to open up a new hostile front. 

The government set the target of a $30 billion cut in the 1995 deficit.^'' 
Increased revenue was to come from three sources: an amnesty on nonpayment of 
income tax for people who now paid up, a similar amnesty on penalties for 
construction that infringed on the building code, and special taxes or rather closure 
of loopholes. Here already were the budget's first defects. The two amnesties, 
instruments of the old regime, simply rewarded the traditional fiscal evasion that 



178 THE CRISIS OF THE ITALIAN STATE 

was one sign of a lack of citizenship. Since they favored the self-employed they 
provoked the criticism that the budget was class-based, although the difference 
between self-employed and salaried did not correspond to the difference between 
middle and working class. Meanwhile the amnesty on abuses of the building codes 
infuriated environmentalists. The special taxes were less controversial, although the 
proposal to reduce the tax immunity of the cooperatives annoyed red and white 
co-ops alike. A tax on dummy companies set up to avoid taxes was an anticipation 
of Tremonti's proposed simplification of the entire taxation system. The financial 
markets also noted that the amnesties were "one-off' measures rather than struc- 
tural improvements in the government's capacity to raise money. 

So the other component of the budget — the cuts in government spend- 
ing — assumed greater importance. A minor clash took place over the subsidy 
for Alto Adige-Siid Tirol. The proposal to cut it infuriated the German-speaking 
minority who were already worried by AN's presence in the government. Since 
the subsidy formed part of the international agreement with Austria, it had 
eventually to be restored. A more significant issue was the cut in the health 
budget, which involved closing some hospitals as well as reducing the number 
of people who obtained free medicines. But even this was overshadowed by the 
problem of pensions. 

Far from representing the Berlusconi government's neoliberalism, which 
was in practice nonexistent, the attempt to reduce spending on pensions was 
necessary and Amato had begun it. The deficit of the state pension fund 
accounted for 22 percent of public spending and would reach 40 percent in 
2025.'^^ Pensions represented in miniature the flaws of the postwar settlement. 
As argued in chapter 4, the system had been left in a haphazard state to permit 
special government intervention in the form of clientelism. In the 1970s, when 
the "bill" fell due, spending on pensions rose along with other social measures. 
Costs were further increased by the decision to upgrade low pensions, by the 
so-called baby pensions, which allowed people to retire from their jobs after a 
relatively short time — say 15 years — and obtain a percentage of their full 
pensions, and by the concessions won by public-sector workers who were 
allowed to retire far earlier than in the private sector, where 35 years were needed 
for a full pension. 

In this context the government's proposals were not harsh. At first it 
attempted a structural reform but, faced with strong opposition, it settled for 
cutting costs. Of the approximately $30 billion involved in the budget, about 
half was to come from extra revenues. Of the other half the cuts in pensions 
represented the major item but amounted to no more than $6 to 7 billion, 
which was approximately 4 percent of planned spending on state pensions in 
1995. These savings were to be achieved by blocking for the year retirement 



Clan Rule 179 

based on years worked, as opposed to age, and by reducing future pensions 
through a change in the methods used to calculate them. 

Since pensions were such a sacred cow, reaction to the government's 
proposals was rapid. That the figures were approximate and the administrative 
details complex added to concern. Berlusconi could legitimately state on 
September 9 that "nothing will be taken away from pensioners, "^^ but he did 
not allay fears. Indeed he proved unable to explain the changes in a convincing 
manner, revealing once more that his skill lay in seduction rather than in 
reasoning. The trade unions saw an opportunity to reaffirm their role as the 
champions of social solidarity and on October 14 a national strike took place. 

It has been argued that adoption of the British electoral system would 
produce clearer political debates among the various socioeconomic actors and 
would lead to firmer choices. ^° Governments would no longer have to pander 
to all interest groups but would cater to their own electorates. In turn this would 
put an end to the overworked state. Such a development is both probable and 
desirable but Berlusconi's government lacked the authority to impose its policy. 
Like the old DC-led governments, it had undermined its legitimacy by using 
its power to serve private interests. Unlike them, it was branded as right-wing, 
which made cooperation with the unions more difficult. 

The other actors did little to help. At a dinner in Agnelli's house in Rome 
on September 23 the Northern industrialist elite made its peace with the upstart 
Berlusconi and urged him to be firm. However employers simultaneously wanted 
social peace and above all they did not wish to see the agreement of July 1993 
endangered. The unions, though, regarded the change in the right to retire as a 
violation of that agreement and they threatened to withdraw from it. They knew 
that pension cuts were necessary but felt they should have been consulted. Whether 
they could have agreed to and supported cuts, whether the Austrian method would 
have worked, remains unknown. It is clear that the attempted firmness of a 
spuriously strong government using the Gaullist method did not work. 

On November 12 1.5 million people demonstrated against the budget in 
Rome. Once more Berlusconi talked tough and then gave way. He had little 
choice as his supporters abandoned him. AN remembered its heritage of social 
concern (which went back to Salo), the Lega saw an opportunity to attack the 
Prime Minister, and the CCD reverted to DC-style mediation. Berlusconi came 
to an agreement with the unions in time to avert another strike planned for 
December 2. Early pensions would be blocked only until June 30, 1995, while 
a general reform was negotiated. The proposed change in calculating the 
amount of money in a pension was forgotten. 

The budget was passed by parliament in the last days of the Berlusconi 
government. The general pension reform was bequeathed to the Dini govern- 



180 THE CRISIS OF THE ITALIAN STATE 

ment. Meanwhile the budget figures had been overtaken by fresh expenditures 
that resulted from the November floods and from the high interest rates. The 
government's aim had been to reduce the deficit from 10 percent of GDP to 
8 percent but the financial markets were skeptical. The IMF declared that a 
supplementary budget would be needed in February 1995 to save a further 
$12 billion. 

Judgments on the Berlusconi government's handling of public finance are 
mostly negative. The stock market had lost 25 percent of its value, while the 
lira stood at a record 1,050 to the mark, and the debt was around 125 percent 
of GDP.^' Inflation, a product of the weak lira, was at last surfacing: in 
December it went above 4 percent and, since the price of raw material imports 
has risen by 15 to 20 percent, it may well go higher.^^ The million jobs that 
Berlusconi had promised in the election campaign were never more than a 
parable: unemployment between November 1993 and November 1994 went 
up from 1 1.3 percent to 12 percent, which was higher than in France.^^ 

The budget saga prompts two general considerations. The first is that 
Berlusconi was guilty of not concentrating his attention on this vital issue and 
that he expended all too much energy as a clan chieftain. The second consider- 
ation is that all the political actors failed to provide leadership on the pension 
issue, demonstrating that the March 27 elections had not brought a positive 
transformation. The old regime's habit of avoiding social clashes by postponing 
decisions lived on. The state was still overworked and weak. 



POLITICS WORSE THAN USUAL? 

It has been argued that the attempt to create a new regime has relied too much 
on referenda, on tinkering with electoral systems, and on using simple methods 
to make complex decisions. Parties and other associations have not changed 
their behavior. ^"^ If anything, they have been weakened by the electorate's 
distrust and are less capable than ever of providing leadership. This view, while 
substantially correct, may be unduly pessimistic. It ignores the fact that, despite 
much recycling of old Christian Democrats and Socialists, these are new parties. 
The governing coalition contained two parties that had never been a part of the 
postwar order and a third whose role had been marginal. FI and the Lega have 
not had the time to turn themselves into parties of government, although AN 
has made the change all too successfully: Meanwhile the PDS has a new leader 
who is trying out a strategy that cannot yet be considered a success or a failure, 
while the PPI's new secretary must adapt his strategy to the still changing 



Clan Rule 181 

electoral system as well as redefine his relationship with the Church, which is 
redefining its own role. 

So this is not a case of change-without-change. That old habits, such as 
fragmentation, lived on does not mean that they could be indulged in as before. 
Before 1992, the collapse of a government less than one year after an election 
would have meant nothing more than a reshuffle of the old ministers, with the 
process to be repeated several times over. Now it has meant that the political 
class has had to step aside to make way for neutral technicians. It may also mean 
fresh elections and the destruction of a party— the Lega. This is not politics as 
usual, although politics may be worse than usual. There is some hope but no 
guarantee that a new order will emerge. The "new" Berlusconi government may 
in fact be part of the transition from the old regime to an as yet undefined 
future regime. A review of the parties' behavior between May and December 
1 994 illustrates the problems they faced as well as possible ftiture developments. 
Forza Italia's existence was virtual until the fall. At the time of the elections 
it had been made up of three components: its charismatic leader, his company, 
and a plethora of clubs that served as an electoral machine. The clubs had no 
say in the organization of the campaign and they remained separate from the 
political movement, which itself was run from the top. 

After the March 28 elections there was a period of conflict as the clubs 
struggled to achieve some power but Berlusconi and his lieutenants distrusted 
them. One reason for this was that the crisis of politics and the reaction against 
the mass parties were strong in Italy. Overlapping with this was Berlusconi's 
desire to avoid having an organization with its own bureaucracy and interests 
come between him and "his people." He could make policy decisions more 
quickly without a structured movement and to win support he relied on his TV 
channels, Gianni Pilo's polls, and his own flair for seduction. The clubs reported 
to a senior Fininvest manager, Angelo Codignoni, who had been appointed by 
Berlusconi as the head of the clubs and who gave them nothing to do. Members 
who asked questions were simply expelled and after the June elections the clubs 
were left dormant until such time as they would be needed again. The political 
movement, which numbered about 4,000, fared no better, and its activist 
leader, Domenico Mennitti, was forced out in June. 

After the elections, though, there was a fourth component in PI: the 
parliamentarians. Inexperienced, owing their election to Berlusconi, they none- 
theless began to criticize— Tiziana Parenti's warnings about Mafia infiltration 
are an example— and to take sides. By the fall a split had developed between 
the segment that was close to AN and that looked toward Previti, and the 
segment that wanted closer ties with the PPL At the same time the clubs were 
reactivated because of the need to fight local elections in 1995. 



182 THE CRISIS OF THE ITALIAN STATE 

These twin developments could have signaled — and may still signal — the 
transformation of FI into an agent of reform. The parliamentarians have no 
direct interest in furthering Fininvest's fortunes, while the clubs, which 
Berlusconi envisaged rooted in, but confined to, civil society, could transmit 
the demands of that society to the FI leadership. To do this, they must be given 
political power and the vertical structure of FI — which has been described as 
Europe's last Stalinist party^^ — would have to be turned upside-down. 

Since this would present a risk to Berlusconi's authority, he was reluctant. 
He preferred a presidential council, composed of men chosen by him and 
dominated by Fininvest executives. Even this had no regular meetings, for best 
of all Berlusconi liked to summon a long-standing loyalist, like a king summon- 
ing a courtier, and entrust him with a particular task. Thus Dell'Utri, who had 
officially returned to Publitalia, remained politically influential. 

In October Previti was named coordinator of FI and proclaimed that "it 
is necessary to go ahead with the movement from the center to the periphery 
in order to arrive as quickly as possible at the reverse movement. "^^ This does 
not sound convincing and Previti is rarely viewed as an advocate of grassroots 
power. Still his remark shows that the leadership is aware of the need for FI to 
be present in political as well as civil society. At the same moment Vittorio Dotti 
was named head of the FI group in the House. Yet another Fininvest lawyer, 
Dotti distanced himself from Previti and called for cooperation with the PPI. 
Significantly he also promised a freer debate within the group. ^^ 

The defeat in the partial local elections of November 20, when the FI vote 
dropped by approximately 10 percent from the European elections, spurred the 
trend toward rebuilding the clubs. Then, on December 19, confronted with 
the governmental crisis, Berlusconi told a Milan meeting (which took place 
appropriately in a theater) that "a tide of ordinary people, a great freedom march 
will make the high priests of the Palace understand whose side the Italy of work 
and justice is on."^^ 

The appeal to the piazza against the palace marked another milestone in 
Berlusconi's populism. It embarrassed the doves in the parliamentary group and 
damaged FI's bid for autonomy since the movement was being ordered to 
mobilize on behalf of its leader, rather than invited to share in his decisions. At 
least initially FI did not take kindly to the piazza: the Turin clubs managed to 
turn out approximately 7,000 people on December 20, but the Milan demon- 
stration was a flop. Moreover it was embarrassing to be outnumbered and 
outchanted by more practiced AN militants wearing Celtic crosses. 

Berlusconi has not resolved the problem of what to do with his movement, 
but his experience as Prime Minister has surely taught him that he cannot 
dispense with it. FI's structure remains vertical: below Previti are the regional 



Clan Rule 183 

and local coordinators, who may indeed have been elected to parliament or to 
regional councils but who have been appointed to their party jobs. Supposedly 
this system is to be stood on its head and power will emanate from the clubs 
who are the base. One remains skeptical. There is a chance that FI could turn 
into the modern capitalist party that Italy has never had. But this requires that 
it not remain a mere appendage of its leader. ^^ 

AN is the segment of the victorious coalition that fared best during the 
Berlusconi government. It defined its goals simply and pursued them unremit- 
tingly. Gianfranco Fini understood that he had been offered legitimacy, a role 
in government and the chance to grow. All these gifts came from Berlusconi, 
without whom they might disappear. The first pillar of Fini's strategy was 
loyalty, to which Bossi's flagrant disloyalty gave added luster. 

During the formation of the government AN was modest in its demands. 
In some of Berlusconi's campaigns, such as the struggle with the Bank of Italy, 
AN provided the shock troops and, when the government fell, AN fully 
endorsed Berlusconi's plan for immediate elections. Linked with loyalry was the 
display of responsibility, which once more contrasted with Bossi's fecklessness. 
Fini abandoned all traces of Fascist mythology — doublebreasted suits replacing 
black shirts — and of Fascist populism, which he abandoned to his critic, 
Teodoro Buontempo, the self-styled voice of the Roman subproletariat and 
Rauti's ally in the January 1995 congress. Fini's language was serious and 
solemn; it was a self-conscious attempt to demonstrate statesmanship. 

Loyalty to Berlusconi did not exclude marking out different positions. 
On the July 13 decree, AN, which had been greatly helped by the Clean Hands 
operation, took a softer stand than FI. During the budget dispute it never forgot 
its heritage of social reform. But disagreement was kept low-key. AN might 
harbor hopes of replacing FI, for its organization was certainly better, but for 
the foreseeable future it needed Berlusconi. The 1 percent decline in its vote at 
the European elections, which followed the foreign criticism, was a warning. 

The second pillar of AN's strategy was a penetration of the state apparatus. 
Masked as a defense of the strong nation-state, this mobilization to put 
supporters into key jobs revealed that AN had inherited DC clientelism. The 
example of state TV has already been noted. The Minister of Agriculture, 
Adriana Poli Bortone, who demonstrated a tenacity worthy of Bisaglia, moved 
her supporters into key posts in the farmers' organizations. ""^ If the privatization 
program slowed down, one of several reasons was AN's desire to preserve the 
economic and political power associated with Enel or Stet. If it stayed in 
government AN would create its own state bourgeoisie. 

In turn this overlapped with the party's defense of its southern base. AN 
feared that privatization would play into the hands of Cuccia, whom it greatly 



184 THE CRISIS OF THE ITALIAN STATE 

distrusted. It disliked the splitting up of Enel, favored by the Lega, lest the South 
be left behind. Although Cariplo is state-owned, AN was wary of the Milan- 
based bank's incursions into the South. '*' Similarly AN's Minister of Transport, 
a former member of the Andreotti clan, protected Bari's role as a center of the 
rail network. 

Attention has been given to whether or not AN remains Fascist. It has been 
noted that AN is nothing more than the old MSI .""^ Certainly the planned congress 
of January 1995, after which the MSI will cease to exist, seems a cosmetic 
operation. Fini, who formerly claimed that in Fascism there was everything, now 
wishes to retain virtually nothing of it."*^ This is equally unconvincing and Rauti 
is right to note the cultural void. But the real issue may be AN's role as a new DC 
and a champion of the resistance to change in Italian society. 

The Lega emerged from the 1994 elections with its dilemma sharpened. 
The mayoral elections of 1993 had taught Bossi that he needed allies and he 
found one in FI. The anti-Southern strand in the Lega and the anti-Fascist 
tradition in Northern Italy ruled out an extension of the alliance to AN. Indeed 
the epithet "Fascist pigs" became part of Bossi's stream of invective. The alliance 
between FI and the Lega worked and the Lega duly won its 122 seats. Yet Bossi 
attacked Berlusconi throughout the campaign. After his victory he declared 
candidly that he had formed the alliance only because "otherwise we would have 
been torn to shreds. '"^^ 

His fears were understandable. As the linchpin of the three-party Freedom 
Pole, FI would gain the leadership of the coalition and Berlusconi would 
become Prime Minister. His appeal to a large segment of Bossi's electorate, 
already strong, was enhanced by the mood in the country. The new voting 
system had produced a majority that must now go to work. The moment when 
the Lega must cease to be a party of protest and become a party of government 
had arrived. This would have been difficult anyway, but it would be even more 
difficult because it entailed working for Berlusconi. The distinctive trait of Lega 
thinking was federalism but Bossi probably had few illusions about the average 
voter's interest in the independent republic of Padania. Fiscal decentralization, 
which was — and remains — an issue, could be undertaken by Forza Italia. As a 
junior partner in the government the Lega would fall under Berlusconi's control 
and next election there would not even be any need to tear it to shreds. 

The solution Bossi derived was to send Roberto Maroni into the govern- 
ment as the head of the Lega delegation, while he himself remained outside to 
assert the Lega's autonomy. One should not, however, overemphasize the 
rational nature of this choice. Maroni explains: "the truth is that Bossi does not 
trust, has never trusted, Berlusconi. He is suspicious of everything Berlusconi 
does, he can't help it, it's stronger than he is."'*'' Behind the personal clash 



Clan Rule 185 

berween rwo charismatic leaders lies a cultural conflict that reveals much about 
the last three hectic years in Italy. 

Where Berlusconi was rich, Bossi was poor, and while Berlusconi had 
three TV channels, Bossi had spent years writing slogans on walls. But even 
more dangerous than the differences were the parallels. Each considered himself 
a sacred vessel: Berlusconi's mission was to save Italy from Communism, Bossi's 
was to save Lombardy from Italy. In August the two were supposedly reconciled 
and were photographed eating incongruous plates of spaghetti in Sardinia. But 
their rivalry went too deep. Bossi's role had been to undermine the old regime, 
but he had nothing to put in its place. Berlusconi sought to incarnate a new 
Italy, but to Bossi he was still a member of the Craxi clan. 

While Maroni participated loyally in the government and pleased Lega 
voters with measures like the attempt to block the Mafia's advance in the North, 
Bossi denounced "Emperor Berlusconi" and watched him grow weaker. In 
December he decided that the moment had come to withdraw from the 
government and restore the Lega's purity. However the segment of the Lega 
that admired Berlusconi thought otherwise. Bossi's charisma no longer exerted 
the influence it had before the 1994 elections and the long-awaited Lega split 
took place. 

It is hardly surprising that the three parties, so different and so unsure of 
their identities, failed to form a coherent coalition. One might imagine that 
Maroni's wing of the Lega could govern comfortably with a Forza Italia that 
possessed some autonomy. Such a coalition could include the PPI once it had 
chosen between Right and Left. The alternative right-wing coalition of a 
Berlusconi in his Christ role, a Forza Italia ruled by Previti, and a clientelistic 
AN appears less suited to a modernized Italy. 

On July 29 the PPI elected Rocco Buttiglione as party secretary. The 
elections had demonstrated that the Center could not survive on its own in the 
winner- take-all system but also that the percentage of votes it had obtained — 
15.7 percent if one adds the A.G percent of Segni's Pact to the PPI's ILl 
percent — could bestow victory on the Left or the Right. There was, however, 
no guarantee that the Center could maintain that share because its supporters 
might well decide that their votes were wasted. Buttiglione's task was to form 
an alliance that would offer his party a place in government. An overlapping 
question was what the Church's role would be in the changed political order. 

Buttiglione was faced with a right wing of his party — of which Roberto 
Formigoni was a spokesman — that wished to ally with Berlusconi, and a 
left — Rosy Bindi — that looked to the PDS. Buttiglione's contradictory solu- 
tion, which he pursued coherendy, was to adopt as a goal an alliance with FI 
from which AN was excluded; however the way to attain such a goal was to 



186 THE CRISIS OF THE ITALIAN STATE 

demonstrate the PPI's power by forming alliances with the PDS on specific 
issues and in certain places. In the local elections of November 20 such an 
alliance enabled Mino Martinazzoli to be elected mayor of Brescia. 

Buttiglione was regarded as being close to Pope John-Paul II and the 
Church's support was vital to the PPL Although its political influence was much 
reduced, the Church still provided "its" party with a structure. Moreover it 
enjoyed what one might call institutional power since President Scalfaro and 
House Speaker Irene Pivetti were devout Catholics. Although the Church had 
been obliged to give up the doctrine of Catholic unity, it replaced it with the 
more modest goal of promoting cooperation among Catholics in the various 
parties. "The seeds are to be found in many fields," said the Vatican Secretary 
of State, Cardinal Angelo Sodano.'*'' 

However, as argued earlier, the Church hierarchy lacked the vision and 
determination it had shown in the postwar period. When Berlusconi was 
summoned before the magistrates, Avvenire £nsi warned the PPI against allying 
with the PDS"*^ and then, as if realizing that this constituted a defense of the 
Prime Minister's conduct. Cardinal Sodano declared that the PPI was free to 
make its own decisions. In doing so, however, he still took time to warn 
Catholics of the importance of abortion as a political issue. 

Berlusconi's brand of consumerism and his habit of comparing himself 
to Christ irritated the hierarchy. However the money allotted in the budget to 
large families and the promise of funding for Catholic schools were forms of 
seduction that the Church could not ignore. Nor was the Church united. The 
red Bishop of Ivrea, who had been Berlinguer's ally, denounced Berlusconi, 
while the conservative Opus Dei supported him. 

Both the PPI and the hierarchy probably realized that most Catholics would 
prefer to ally with FI rather than with the PDS. In 1994 the hierarchy did not 
have the power to persuade them to take a different path, even if it had one to 
offer. When Berlusconi grew weaker the PPI offered its own vote of no confidence 
and yet it did not exclude a future alliance with FI. Ambiguity reigned. 

The PPI-PDS alliance was one option for Buttiglione but it was the 
cornerstone of D'Alema's policy. Elected to replace Occhetto by the PDS national 
council, which gave him 249 votes to Walter Veltroni's 173, D'Alema was 
perceived as the candidate of Communist tradition — his father had been an 
important PCI official and he himself had been head of the Young Communists — 
and of the party bureaucracy. By contrast Veltroni, an expert on the media and 
an admirer of Bobby Kennedy, was considered better able to overcome the 
anti-Communism that Berlusconi had exploited and to appeal to Centrist voters. 

D'Alema, however, followed a double-pronged strategy. He defended the 
PDS apparatus, especially by leaving it alone. Where Occhetto called for daily 



Clan Rule 1 87 

transformations of the party, D'Alema said that the PDS must "become what it 
is," namely, a Social Democratic party with a strong organization. "*' The second 
part of his strategy was that the PDS must form an alliance with the Center. The 
November 20 local elections were a triumph for D'Alema, who used them as 
proof that the PPI could win votes by forming joint lists with the PDS. 

Both D'Alema and Veltroni believe that the March defeat stemmed from 
the failure to ally with the Center. To remove the obstacle cited then by Segni, 
D'Alema decided that the PDS would not give priority to its relationship with 
RC.^'^ The risk D'Alema is running in his bid to convince the voters that he 
and his party have abandoned all traces of sectarianism is that the Catholics may 
still spurn his embrace. Meanwhile RC with its 40 parliamentary seats remained 
in proud but sterile isolation, able to organize opposition to the budget but not 
to help offer an alternative. 

In the fall of 1994 the magistrates deepened their investigation into the 
ways in which the red co-ops may have illicitly financed the PCI-PDS. Although 
the detective work was difficult because of the historic and organic relationship 
between the cooperative movement and the Left, this seemed to be a scandal 
waiting to be unearthed. It consisted of alleged cases in which the PCI-PDS 
obtained public contracts for co-ops, cases in which co-ops paid the salaries or 
social security contributions of people who in fact worked for the party, and 
cases in which co-ops were born, received grants from the Italian or EU 
authorities, and then died, having turned the grants over to the party.^' In 
January 1995 accusations were made against the co-op national president, 
Giancarlo Pasquini, and the scandal may reach the PDS leadership. 

Despite this the Left has probably gained popularity because of the 
Berlusconi government's errors, and yet two problems remain. The first is 
summed up in the accusation that the Left has "yet again no positive propos- 
als."^^ In one sense this is unfair to the PDS's 1994 election program, to its 
anti-Mafia stand, and to its support of the Clean Hands investigation. However 
it remains true that the Left has not linked its proposals for reform of the state 
with a vision of social change. This leads to the second problem of the Left's 
intrinsic electoral weakness and its resultant reliance on the highly dubious 
alliance with the Catholics. Both aspects of this problem have existed through- 
out the history of postwar Italy as a legacy of the PCI's (self-)exclusion from 
government. They led Berlinguer to the historic compromise and they survived 
Occhetto's innovations. The PCI-PDS has changed a great deal but it has not 
been able to spawn a broad Left-Center coalition that can win elections. 
Occhetto's victories in 1993 were short-lived. 

The parties of opposition have not then reshaped themselves into a 
credible alternative to the barely credible coalitions of the Right. Until the Left 



188 THE CRISIS OF THE ITALIAN STATE 

comes to power with or without the Center, the reform of the ItaUan state 
cannot be completed. But the disarray of almost all the parties became clear 
when the government collapsed on December 21, 1994. 



THE FALL OF BERLUSCONI 

The Lega's defection brought Berlusconi down but Bossi could not have 
withdrawn from the government if it had not lost credibility. The July 13 
decree, the summons by the magistrates, and the budget fiasco were the real 
causes of its disintegration. Pi's defeat in the November 20 local elections 
demonstrated that Berlusconi was vulnerable. 

Yet during the battle that followed his fall he demonstrated his populist's 
skills and the weakness of his opponents. On December 19, two days before he 
announced his resignation, he set out his case in the Milan theater. He had been 
elected by the people and, if parliament overthrew him, it delegitimized itself 
and the people must make its choice again via fresh elections. Berlusconi 
resorted to emotional language: Bossi was a Judas who had to be "massacred'V^ 
he himself was a victim whose only crime was that he would not hand Italy over 
to the Communists. He hammered home this message on "his" state TV as well 
as on the Fininvest channels. On December 19 he was on TV live from the 
theater and on another channel in a specially prepared video: he competed with 
himself for the nation's attention. 

Although he did not forget his other weapons, such as polls that showed 
his enemies reduced to a handful of votes and allusions to soccer in which he 
cast himself as "an attacker capable of scoring 30 goals . . . whose opponents 
are breaking his legs,"^'^ Berlusconi stuck to his strategy of excoriating his 
political rivals and appealing over their evil heads to the good TV-watching 
Italian people. In this Manichaean world there was room for only the tiniest of 
compromises. Equally, such mundane issues as the deficit and the plunging lira 
became irrelevant. 

Berlusconi's resignation speech on December 21 was a diatribe against 
Bossi. On December 30 he issued a fresh blast in which he declared parliament 
to be illegitimate and called again for elections. An outraged President Scalfaro 
invited him to step aside for the nation's sake. Berlusconi had the full support 
of AN and of the Previti wing of FI, but the Dotti wing, disturbed by the bitter 
polarization of politics, began suggesting that he give way to another member 
of his government, such as Urbani or Dini. Although Berlusconi quashed this 
promising demonstration of FI's autonomy, he allowed Dell'Utri to suggest on 



Clan Rule 189 

January 6 that an Urbani or Dini government might be acceptable, if it were 
strictly limited in time and guaranteed early elections. 

This governmental crisis in no sense resembled the innumerable crises of 
the postwar order. However long they lasted and however frequent they were, 
their parameters were clear. Berlusconi, by appealing to the people, was now 
undermining the legitimacy oftheir representatives who, in turn, did not possess 
the resilience of the old DC. Berlusconi laid bare their fragility, which may in 
the long run be a useful service. 

The Lega split into a majority that backed Bossi, a handful that supported 
a new pro-Berlusconi formation called the Federalisti liberaldemocratici,^^ and 
a minority led by Maroni that was not prepared to vote for anything other than 
a Freedom Pole government. The first and third groups were held together by 
a dread of fresh elections, in which they would be annihilated. However Bossi, 
like Berlusconi, lived through the government crisis as if it were a great myth 
in which he, a dying King Arthur, was destined to defeat the Knight of the 
Golden Mask, the Prime Minister.^^ One cannot help but share the Lega's 
doubts about its future, although Bossi continues to fascinate. 

The Lega's divisions meant that neither Berlusconi nor the opposition 
had a reliable majority in the House. This created a further novelty: President 
Scalfaro played a more active role than presidents had done when the DC was 
strong. His goal was to defend the parliamentary rather than the plebiscitary 
view of democracy and to avoid new elections. Meanwhile Buttiglione held the 
PPI together on a position of supporting a non-Berlusconi government, 
whether led by PI or a Catholic like Romano Prodi, provided that it be a real 
government and not simply one that would collapse on command and provoke 
elections. Behind this facade of unity lay a seething confusion about whether 
the PPI should go into elections— if they were held— in alliance with the PDS, 
and whether its long-term future did not lie in a coalition with PI, and even 
with an AN that would renounce Fascism at its January congress. 

The PDS stood compact behind D'Alema, who opted for the cautious 
policy of calling for a government of "truce" and of "rules." Determined to 
show that the PDS was not conspiring to reverse the verdict of the March 28 
elections, D'Alema wanted to include FI and even AN in such a government, 
provided again that it would not collapse on demand. By "truce" D'Alema also 
meant an end to polarization; by "rules" he meant a change in the electoral law 
to eliminate the 25 percent proportional representation, the establishment of 
tighter regulations on TV campaign advertising, and the enactment of eco- 
nomic measures to calm the financial markets and of antitrust legislation. 

Although such "rules" marked a sensible contribution toward the reform 
of the Italian state, one cannot help suspecting that D'Alema's ecumenism 



190 THE CRISIS OF THE ITALIAN STATE 

masked the PDS's residual fear of illegitimacy. Such timidity left the initiative 
with Berlusconi. In general his opponents were able to agree on little except 
their desire to get rid of him and they seemed to have no project of their own. 
One may agree that Berlusconi's blend of clan warfare and (in practice weak) 
authoritarian populism offers Italy less hope than the politics of cooperation. 
But cooperation must not slip back into the endless mediation of the old regime; 
it must take active forms. Post-Cold War Italy should be able to tolerate and 
use sharp conflicts, it should not fear them. 

On January 12 a delicate compromise surfaced. One of Berlusconi's 
ex-ministers would form a government of technicians. It would not guarantee 
early elections, but would have a specific, limited program to be executed in a 
few months.^'' This would allow both sides to claim victory. The next day 
Lamberto Dini was invited by Scalfaro to undertake the task. Dini announced 
a four-point program: a supplementary budget, pension reform, a switch from 
PR to winner-take-all in the regional elections, scheduled for June 1995, and 
equal access to TV during campaigns. Significantly absent was antitrust legis- 
lation. But the formula worked initially, for Berlusconi claimed he had a 
gentleman's agreement that there would be elections in June, while the Lega 
wished the government long life. 

However when Dini announced his team of ministers on January 17, 
Berlusconi discarded his tolerant stance. Neither then nor in his January 23 
speech in the parliamentary debate on confirmation did Dini mention elections. 
Berlusconi returned to his victim's role, insisting that Scalfaro had deceived 
him, and also declared that democracy was being subverted. He was probably 
disconcerted at the breadth of parliamentary support for Dini, which included 
the PDS although not RC. Nor can the sharp rise in the stock market — 4 
percent in the first full day of trading after Dini's nomination — have pleased 
him. Dini's January 23 speech expanded the number of government projects 
to include privatization and a return to the EMS, two issues on which Berlusconi 
is vulnerable and that cannot be handled by a government of transition. Yet 
Berlusconi knew from Pilo's polls that FI's electorate would not follow him in 
his bid to tear down a right-wing but reforming government. 

His solution, which was emulated by AN and the CCD, was abstention. 
Dotti's doves wanted to vote yes but followed suit. The conservative Dini thus 
began work with PDS but not FI backing. His is a fragile government and one 
can only speculate how long it will last. It has no outright majority — the 302 
yes votes are outnumbered by the 270 abstentions and RC's 39 no votes. The 
financial markets noted this without enthusiasm. The underlying issue, how- 
ever, is that the new political class has demonstrated its inability to govern Italy 
and has handed responsibility for key decisions to neutral experts. Although 



Clan Rule 191 

Dini is being compared with Ciampi, the two governments are very different 
poHtical entities. Ciampi operated during a hiatus while the pohticians prepared 
a new electoral system; Dini was needed because the first product of that system 
had failed to govern efficiently and there were no alternatives to it. 

Does this mean that the broader reform movement in Italian society has 
failed too? One indication that it might have done so was the arrest of a group 
of Lega, PPI, and Socialist politicians in Lombardy who had allegedly divided 
up the jobs in the local health centers by parry affiliation. Nearly three years 
after Di Pietro began his investigation, clientelism was alive and well in Milan. 
As argued in chapter 7, the social groups pressing for reform of the state had 
the option of giving up and trying to defend only their own interests. 
Berlusconi's two amnesties indicated that might be happening. 

Indeed it has been stated that "the discourse of change is going out of 
fashion." However the same source maintains that Italy "has no genetic flaw 
and is not condemned to collective tragedy. "^^ The problem is how to resolve 
the contrast between economic dynamism and social incoherence. Such inco- 
herence, which provides a breeding ground for the politics of charismatic leaders 
who govern with TV and opinion polls, has not been cured by the Clean Hands 
operation. Rather the designation of the old political class as scapegoat has 
absolved the mass of citizens from the task of self-scrutiny. 

I shall return in the conclusion to the societal issues that lie behind the 
Berlusconi phenomenon, but I wish to note here that the analysis of recent 
politics leads to the conclusion that the period of Italian history that began in 
February 1992 is unfinished and unpredictable. It has been a time of change 
rather than of revolution and restoration, and that change is continuing. Can 
Berlusconi stage a comeback? My impression is that the elites have lost faith in 
him, but that many Italians perceive him as a great leader brought down by 
lesser men. Would he govern in the same way next time around? Which way 
will the Catholics turn and will the PDS succeed in avoiding isolation? Is this 
the end of the road for the Lega, which split yet again when Maroni's supporters 
divided? Fresh evidence has emerged that Giulio Andreotti made secret trips to 
Sicily and on February 17 he will stand trial. It is time for my three dots . . . 



Conclusion: 
The Elusive Citizen 



Throughout this study I have invoked writers to provide insights into politics 
and society because, whatever else the postwar period may or may not have 
been, it was a great period of Italian writing and cinema. Of all these writers, 
the one most central to our preoccupations is Leonardo Sciascia, who has been 
much read during the last three years. Toto Riina, supposedly illiterate, quoted 
from The Day of the Owl, while L'Unita copublished four small volumes of 
Sciascia's occasional writings. That he would be cited in the Mafia debate was 
inevitable, but the real reason why Sciascia is being reread is that the concept 
of citizenship is at the core of his writing. 

He has recounted that when he worked as an elementary schoolteacher 
in the years after the World War II, he was struck by the absurdity of explaining 
Italian unification to the hungry, barefooted children who were his pupils.^ The 
schoolmaster is the incarnation of the state and Sciascia realized that his was a 
non-state and his pupils noncitizens. 

Several of his novels depict the same discovery and The Day of the Owl 
may serve as an example. The policeman, Bellodi, who comes from Emilia with 
its civic traditions, learns, as he sets about finding a murderer in Sicily, that 
bystanders have seen nothing, informers are killed, and the mystery recedes. 
Bellodi succeeds in interrogating a Mafia chieftain, Don Mariano, but behind 
the Don stand Roman politicians and Bellodi finds himself transferred out of 
Sicily. Sciascia reverses the traditional detective story to recount a parable of the 



194 THE CRISIS OF THE ITALIAN STATE 

absent state. The policeman is its representative, the bystanders are its noncit- 
izens, the Mafioso strips it of its power and substitutes for its laws a counterstate 
based on violence while his accomplices, the politicians, divert the instruments 
of government to private ends. 

That they are in the capital, Rome, demonstrates that Sciascia considers 
Sicily and its Mafia as emblematic of Italy. To Roman unreason he opposes a 
mythical Paris, citadel of the Enlightenment and inhabited by writers like the 
inevitable Stendhal, Diderot (whom Sciascia seeks to emulate), Pascal, and La 
Rochefoucauld. The last of these may guide us in our discussion of the second 
phase of Sciascia's discourse on citizenship. 

So far we have seen how the self, as it moves outward to make contact with 
a social order that is ideally inspired by justice and reason, discovers only chaos. 
Self-identification takes place in solitude: I do not trust, therefore I am. Sciascia 
himself explains that his family defended him against the Fascist state. But in his 
novels the family does not even possess the crude unity of "amoral familism"; it 
is conflict- ridden and irrational. So the violence of the counterstate penetrates the 
self and Sciascia admits that when he attacks the Mafia he feels a "split, a 
laceration" within himself As La Rochefoucauld tells us, there is no united, much 
less reasonable, self Bellodi finds himself admiring Don Mariano, while in Todo 
modo the narrator feels an affinity with Don Gaetano, but he also accuses himself 
of killing him, thus admitting his complicity in DC misgovernment. 

The quest turns into a circle in which there are no citizens, no families, 
no regional or professional groups, no genuine institutions, and hence no state. 
Instead there is "the system," a Foucaultian monstrosity that draws its critics 
into its self- alienation.- Sciascia denounced the historic compromise, because, 
in his eyes, the PCI ceased to criticize the Christian Democrats and joined in 
their misgovernment. Similarly he turned against Leoluca Orlando, whom he 
accused of using the anti-Mafia struggle as a means of gaining power. 

The absence of legitimate power explains why Sciascia offers as a model 
the kidnapped Aldo Moro, a dominant figure in the system who is expelled 
from it by an unholy alliance of the Red Brigades, the Communists, and the 
Catholics. Suddenly powerless, Moro can tell the truth in his prison letters. 
Similarly Sciascia intimates that he, the narrator, can transcend the laceration 
of the self by using the language of literature. However it is hard to see why 
literature should, by some special grace, escape the general alienation. The 
powerless Moro and the omniscient artist are subterfuges behind whom lies the 
absent state. Sciascia's vision of Italian history, in which the governing group 
draws in a segment of the governed and resumes oppression under a different 
name, is akin to the pessimism of the Lampedusa whom he came to admire.^ 
But unlike Tancredi, Sciascia's characters try desperately to become citizens: 



Conclusion 195 

the hero of his last novel, Una storia sempUce, accomplishes his duty but is 
rewarded by being forced into an act of violence. 

The quest for citizenship is a parable of the last three years of Italian 
history. To probe it using very different methodological tools we might consider 
Robert Putnam's suggestive thesis that the key to good government is the 
presence of the "civic community.'"* Since Putnam deals with Italy's regional 
governments and poses the question of why Emilia- Romagna is a success and 
Calabria a failure, we must twist his argument. However we may begin with his 
assertion that the determining factor is the civic community, which is rich in 
associational life, encourages horizontal interaction, and engenders trust among 
its participants. The historical model is the medieval commune and the memory 
of its democratic procedures has survived into the twentieth century. 

Certainly Putnam's remarks on clientelism are apt. A vertical relationship, 
clientelism breeds narrow self-interest and distrust of one's equals who are also 
competitors. Putnam's view of the Catholic Church as providing an alternative 
to the civic community is akin to my interpretation of Pius XII. I would add, 
however, that along with its vertical bonds, the Church can also create — via parish 
life — horizontal links, one example of which would be the white cooperatives of 
the Veneto. 

However it is the nature of the participation in associations that appears 
to me more problematic than Putnam maintains. Admittedly I have the unfair 
advantage of writing after the revelations of systemic clientelism in northern 
Italy — revelations that would appear to contradict the notion of a successful 
civic community. Participation in associations is obviously not the same in all 
countries: parent- teacher organizations offer a very different kind of experience 
in Bologna than in Washington. But there may also be differences of quality. 
Sociologists of the Third Republic have argued that French associations were 
often merely delinquent peer groups. In Italian associations, as in political 
parties, the tendency toward fragmentation is masked by a facade of unity. As 
in the student assemblies of the 1970s, belonging is its own goal — once more 
the importance of stare insieme — and decisions are infrequent, which means 
that the associations do not lead outward to wider groups. 

Such traits are easily explicable if we reverse Putnam's historical schema 
and argue in a more banal fashion that the formative experience was not the 
early medieval commune but the centuries of foreign occupation. From this 
experience stem the suspicion of others, the fear of conspiracies — to which 
Berlusconi is as prone as Craxi was — and the disenchanted pessimism. Just as 
Salvadori and Cammelli depict the besieged state, so one might talk of the 
besieged individual, who trusts only organizations that are close, tight, and 
equipped for war, such as the clan or the family. 



196 THE CRISIS OF THE IT A II AN STATE 

Of the clan we have said enough. Of the family Paul Ginsborg notes that it 
has maintained its strength by adapting: adolescents remain at home for longer 
because jobs and housing have grown more scarce. The problem lies in turning the 
family outward toward the broader society.^ The inward-directed family is bril- 
liantly depicted in Ertore Scola's La Famiglia (1987). In each generation political 
society fails the family: The grandfather laments the decline of his friend Carducci, 
who has degenerated into the poet laureate of the new and artificial Italy; the son 
places his hopes in the Partito d'Azione, while his grandson, a child of the late 1 960s, 
roams the world but returns to the family flat, where the entire film takes place. 
The final shot is of the family assembled: biological continuity, a society unto itself 

That Scola, a director with close ties to the PDS, should make such a film 
is intriguing. Of course I am not using it to argue that Robert Putnam's civic 
community does not exist. That would be foolish, faced as I am with the red 
cooperatives of Emilia-Romagna. However I am suggesting that in Italy the 
civic community is very much a Gemeinschafi, dependent on close relations and 
emotional bonds. The PCI and the Church, as well as the Lega and FI, have 
fostered this kind of community. Moreover some of the great demonstrations 
of citizenship in the last three years have been passionate, spontaneous, and 
defensive. The fax people are an example, despite their advanced technology. 

Putnam maintains correctly that a modern system of government requires 
a broader, social trust. In our terms this would be more of a Gesellschafi, a cool, 
rational calculation that enlightened self-interest is best served by collaboration 
with people one does not know but whose self-interest points them in the same 
direction. This kind of community deals in contracts and above all in institu- 
tions. One returns to Violante's comment that the anti-Mafia struggle cannot 
be left to the police and the magistrates. Pressure from public opinion is 
necessary in any country, but if perpetual demonstrations are required to enable 
or to convince public representatives to do their job, then something is amiss. 

Many issues do not lend themselves to the "everybody-in-the-piazza" 
approach. Prominent among them are institutions and laws regulating the market: 
it is difficult to organize demonstrations in support of a stronger Consob (the 
equivalent of the Securities and Exchange Commission). Yet the need to regulate 
the stock market and to encourage companies and brokers to provide more 
information is great. Similarly the bizarre situation of a Prime Minister who 
exercised power over state TV, with which his own networks competed, would 
not have arisen if codes of conduct for public officials had been in place. 

The example of electoral reform, long considered a matter to which most 
people were indifferent, demonstrates how an alliance of political leaders and 
experts can create an interest in supposedly remote issues. While it is possible 
that this is no longer the key issue, Pasquino has pointed out that the struggle 



Conclusion 197 

to change institutions is a learning process that does not end with the first 
changes. To take another example, Berlusconi may have educated the electorate 
on the importance of the public-private divide by his July 24 meeting at Arcore. 
The privatizations have widened interest in the workings of the stock market. 
Credito Italiano's present bid to take over Credito Romagnolo, unthinkable 
five years ago, is providing small shareholders and even the general public with 
precious insights into contemporary capitalism. 

The history of the last three years in Italy has instilled a hope that the actions 
of the Berlusconi government have not extinguished. Institutional change does 
not mean much unless the public servants believe in it and in themselves. But 
here again an evolution has taken place. The magistrates have had to fight so hard 
to defend an independence that they had previously surrendered that they will 
surely not relinquish it again. The memory of Di Pietro's impassioned TV 
performance should remove the need for future such performances. 

A nation should build on its strengths. Since local ties are strong in Italy, a 
fruitful approach would be to expand them so that they embrace more people and 
a wider range of tasks. Decentralization could strengthen rather than undermine 
the state, provided that it is undertaken without rhetoric and that responsibility 
and power move together from center to periphery. The tendency toward what 
has been called "neo-feudal anarchy," which results from the inadequacy of the 
overworked state, should be corrected by widening the sense of community. 

The changing Italy will of course remain Italy. The family is not going to 
wither away and even if governments perform better, admiration for Franco Baresi 
will not decline. This is entirely as it should be. Throughout this book I have 
drawn parallels with France and Britain, but these elucidate arguments and do 
not create models. Indeed the excessive admiration for foreign models is a 
damaging trait of Italian political culture. The state may cease to be overworked 
but it will and must remain interventionist. Italy cannot adopt the "Erhard" 
solution, but it can produce its own Italian version of the Austrian solution. 

Above all Italy can produce citizens. The gamble of the last three years has 
been that the protesting social groups — the urban middle classes of northern Italy, 
the small- and medium-sized entrepreneurs of Lombardy, the anti-Mafia move- 
ment in Sicily, and so on — will not be able to realize their goals merely by gaining 
a greater share of power in a clientelistic state. Nor will they be bought off by the 
new version of clan government offered by Berlusconi. Rather they will have to 
create a state, which is neither overbearing nor absent because it is no longer 
overworked, in which the market functions and public goods are not sold to the 
highest bidder but are distributed in a manner that is recognizably fairer and more 
efficient. In short these and other groups will break out of the trap depicted by 
Sciascia and citizenship will cease to be elusive. 



NOTES 



Chapter 1 

1. The newspaper II Manifesto marked the celebration with a book, II crac delta 
Banca Romana (Rome: II Manifesto, 1993). 

2. Ralph Dahrendorf, Espresso, June 27, 1 993, p. 5 1 . 

3. Gianfranco Pasquino, "A Case of Regime Crisis" in G. Pasquino and P. 
McCarthy, eds.. The End of Postwar Politics in Italy: The Landmark Elections 
o/;5>5>2 (Boulder: Westview, 1993), p. 1. 

4. Franco Cazzola, L'ltalia del Pizzo (Turin: Einaudi, 1992), pp. 10-59. 

5. For Giuseppe Garofano's judgment of Gardini, see La Repubblica, November 
23, 1993. For Romiti's mishaps, see La Repubblica, February 16, 1994, and 
March 1, 1994. For Agnelli and Valletta, see Piero Bairati, Valletta (Turin: 
Unione Tipografico-Editrice Torrinese, 1983), pp. 62 and 310. 

6. Sergio Romano, LItalia scappata di mano {M'lhn: Longanesi, 1993), pp. 10-16. 

7. Giorgio Bocca, Espresso, }u\y 15, 1994, p. 5. 

8. The Italian name for it is gattopardismo and the historical process of change 
without change is called trasformismo. 

9. Massimo L. Salvadori, Storia dltalia e crisi di regime (Bologna: II Mulino, 
1994), p. 36. See also Marco Cammelli, "Sistema politico bloccato, stato 
accentrato" (manuscript version). 

10. Vera Zamagni, Dalla periferia al centro (Bologna: II Mulino, 1990), p. 143. I 
have drawn much on this book for the economic data in this chapter and on 
Denis Mack Smith, Italy, a Modem History (Ann Arbor: University of Mich- 
igan Press, 1969), for the political data. 

11. Giulio Sapelli, Sul capitalismo italiano (Milan: Feltrinelli, 1993), p. 156. 

12. Salvatore Lupo, Storia della Mafia (Rome: Donzelli, 1993), p. 158. See also 
pp. 19-66 for a discussion of the Mafia during this period. Also Raimondo 
Catanzaro, // delitto come impresa: storia sociale della Mafia (Padua: Liviana, 
1988), pp. 84-141. 



200 THE CRISIS OF THE ITALIAN STATE 

13. Giorgio Galli, Storia della Democrazia cristiana (Bari: Laterza, 1978), pp. 7-19. 
Galli goes as far as to say that the Church hierarchy "Hquidated" the PPI (p. 5). 

14. Giovanni Gentile, quoted in Alberto Asor Rosa, Storia d'ltalia, vol. 4, t. 2 
(Turin: Einaudi, 1975), p. 1411. 



Chapter 2 

1 . Statistics on the 1 992 and 1 994 elections are taken from La Repubblica, March 
30, 1994. 

2. Gianni Baget-Bozzo, II Partito cristiano al potere (Florence: Vallechi, 1974), 
vol. l,p. 220. 

3. y4yyfwr^, September 21, 1993. 

4. La Repubblica, October 26, 1993, and L'Unita, October 27, 1993. 

5. La Repubblica, January 11,1 994. 

6. n Manifesto, March 15, 1994. 

7. The figures on mass attendance are taken from F. Spotts and T. Wieser, Italy, A 
Difficult Democracy {Cambridge: Cambridge University Press, 1986), p. 247. 

8. La Repubblica, March 30, 1994. 

9. L'Unita, Apn\ 15, 1994. 

10. La Repubblica, April 14,1 994. 

11. La Stampa, October 4, 1993. 

12. La Repubblica, March 29, 1994. 

13. The main historical works, on which I have drawn heavily in this chapter, are: 
Pietro Scoppola, La repubblica dei partiti {BoiognA: II Mulino, 1991), and La 
propostapolitica di De Gasperi (Bolognx. II Mulino, 1977); Silvio Lanaro, Storia 
dell'Italia repubblicana (Venezia: Marsilio, 1992); Aurelio Lepre, Storia della 
prima Repubblica (Bologna: II Mulino, 1993); Paul Ginsborg, Storia d'ltalia 
dal dopoguerra a oggi (Turin: Einaudi, 1989). On the Resistance I have used 
Claudio Pavone, Una guerra civile: un saggio storico sulla moralita della 
Resistenza (Turin: Bollati Boringhieri, 1991). See also "L'ltalia repubblicana: 
tre autori a confronto," Passato e presente, a. XI, n. 29 (1993), pp. 1 1-32. 

14. For a debate on this issue see "L'ltalia repubblicana: tre autori a confronto," 
op. cit., p. 18. 

15. Silvio Lanaro, op. cit., p. 44. On the general issue see John L. Ha.rpei, America 
and the Reconstruction of Italy (Cambridge: Cambridge University Press, 
1986), p. 87. Harper argues that Italian groups had more fi-eedom than is 
commonly thought with respect to the United States and that they exploited 
it skillfully. On the 1948 elections, see David Ellwood, "The 1948 elections 



Notes 201 

in Italy: A Cold War Propaganda Battle" in Historical Journal of Filniy Radio 
and TV, vol. 13, n. 1 (1993): 19-33. See also James E. Miller, 77?^ United 
States and Italy, 1940-1 950 {Chzpei Hill: University of North Carolina Press, 
1986), pp. 213-74. 

16. A. Lepre, op. cit., p. 9. 

17. Paul Ginsborg, op. cit., pp. 42-44. 

18. Vera Zamagni, D alia per iferia al centra (Bologna: II Mulino, 1990), p. 403. 

19. P. Scoppola, La repubblica dei partiti, pp. 74-81. 

20. The Italian term is poliedricita — see Marina Addis Sabe, Gioventii italiana del 
Littorio, Prefazione di U. A. Grimaldi (Milan: Feltrinelli, 1973), p. 33. 

21. P. P. Pasolini to Luciano Serra undated (August 1943) in P. P. Pasolini, Lettere 
1940-1954 (Turin: Einaudi, 1986), p. 184. For his early writings, see Mario 
Ricci, ed., Pasolini e "II Setaccio" {Bologna.: Cappelli, 1977). 

22. Salvatore Satta, De Profitndis (Milan: Adelphi, 1980), pp. 79, 175, and 16. 
Satta's book was written between June 1944 and April 1945. It was first 
published in 1948. 

23. Ennio Di Nolfo, Vaticano e Stati Uniti 1939-1952 (Milan: Franco Angeli, 
1978), p. 427. 

24. A. Lepre, op. cit., p. 18. On Pius XII, see also S. Lanaro, op. cit., pp. 96-103. 
On the Church under Fascism, see Guido Verucci, La Chiesa nella societa 
contemporanea (Bari: Laterza, 1988), pp. 33-57. For Fellini's comment, see 
I'f/«/>^, October 20, 1993. 

25. Cardinal Domenico Tardini, Ennio di Nolfo, Vaticano e Stati Uniti 1939- 
1952, op. cit., pp. 279-81. I have used these documents as a major source for 
the Vatican's role, although they must be treated with care as they constitute 
the Vatican's campaign to win the U.S. government over to its views. 

26. Lanaro thinks the Vatican's flirtation with a Salazar-like solution was blocked 
by the rise of anti-Fascism — op. cit., pp. 90-95. Scoppola agrees — Laproposta 
politica di De Gasperi, p. 46 — but argues that the Vatican continued to be 
tempted by authoritarianism. 

27. Ennio Di Nolfo, op. cit., p. 450. Tardini gives Italy away on p. 293. 

28. For good discussions of this issue, see Paul Ginsborg, op. cit., p. 106 and 
Antonio Gambino, Storia del dopogiterra (Bari: Laterza, 1975), p. 103. 

29. P. Scoppola, La proposta politica di De Gasperi, p. 73. 

30. On Pius XII and the state, see G. Baget Bozzo, op. cit., vol. 1, p. 261. 

31. P. Scoppola, ed., Chiesa e State nella storia d'ltalia (Bari: Laterza, 1967), pp. 
783, 786, and 794. 

32. At the same moment the Vatican was wondering whether the Axis powers would 
not be better than the Allies at maintaining order once the war ended. See Ennio 
Di Nolfo, op. cit., pp. 190-200. For De Gasperi's statement, see p. 54. 



202 THE CRISIS OF THE ITALIAN STATE 

33. G. Verucci, op. cit., p. 218. See also Enzo Collotti, "Collocazione inter- 
nazionale dell'Italia dairarmistizio alle premesse dell'alleanza arlantica," in 
L 'Italia dalla Liberazione alia repubblica (Milan: Feltrinelli, 1 976) , pp. 79- 1 07. 
Collotti argues that domestic actors used the international situation to advance 
their cause and that De Gasperi saw the coalitions with the Left as a temporary 
phase. 

34. The thesis of the three overlapping struggles is found in Claudio Pavone, op. 
cit. 

35. Renata Vigano, L'Agnese va a morire (Turin: Einaudi, 1949), p. 142. 

36. Cado Levi, L'Orologio {Txxnn: Einaudi, first published 1949, re-edited 1989), 
p. 308. Unsurprisingly Levi's novel has been much discussed in the last two 
years. 

37. For an assessment of De Gasperi's government as conservative, see F. Catalano, 
"The Rebirth ofthe Party System 1944-1948," in S. J. Woolf, ed., The Rebirth 
of Italy 1943-1950 (New York: Humanities Press, 1971), pp. 57-94. The 
majority of Italian historians take this view. See Giorgio Galli, op. cit., p. 74. 
Pietro Scoppola, who argues passionately that De Gasperi was not a conserva- 
tive, states his case in both of his books and also in "L'awento di De Gasperi," 
in L 'Italia dalla Liberazione alia repubblica, op. cit., pp. 31 5-49. 

38. Guido Carli, Intervista sul capitalismo (Bari: Laterza, 1977), p. 71. 

39. These figures are taken from A. Lepre, op. cit., p. 128. David Ellwood notes 
that 36 labor leaders were killed in Sicily alone at the time of the 1948 
elections — op. cit., p. 23. 

40. Silvio Lanaro uses the term real cultural repression to describe the atmosphere 
in the schools in the 1950s — "L'ltalia repubblicana: tre autori a confronto," 
op. cit., p. 27. 

41. Nicola Tranfaglia, ed., Mafia, Politica e Ajfari 1943-1991 (Bari: Laterza, 
1992), pp. 20-42. 

42. Carlo Guarnieri, "Bureaucrazie pubbliche e consolidamento democratico: il 
caso italiano," Rivista italiana di scienza politica, a. XVIII, n. 1 (April 1988): 
73-103. See also Marco Cammelli, op. cit. 

43. The two outstanding historians ofthe DC, Scoppola and Baget Bozzo, take 
radically different positions on De Gasperi. Scoppola has dedicated great 
learning and passion to defending the thesis that De Gasperi fought to create 
a DC that was autonomous ofthe Vatican, that De Gasperi should not be 
considered a conservative, and that even after 1947 he maintained a link with 
the PCI, which he considered an authentic part ofthe new republic. Baget 
Bozzo, whose II Partita cristiano al Potere'is written with equal erudition and 
passion, denies that De Gasperi saved Italy from Pius XII (p. 359), declares 
that at least from 1946 on De Gasperi should be considered a conservative 



Notes 203 

(p. 508), and concludes that De Gasperi left the DC without a worldview (p. 
510). For a non-Italian historian's view of De Gasperi see S. J. Woolf, The 
Rebirth of Italy, op. cit., pp. IIAA?). 
AA. Giorgio La Pira, "L'attesa della povera gente," Cronache sociali (J anusiry 1950): 
2-6. For this discussion of Dossetti I have relied much on Baget Bozzo who 
was himself a Dossettiano. He is not uncritical of Dossetti (op. cit., p. 347) 
whom he accuses of not standing up to De Gasperi. However the judgment 
in the paragraph that follows is my own. 

45. G. Baget Bozzo, op. cit., p. 67. 

46. Ibid., p. 510. 

47. L. Domenici, "Unificazione e pluralita in Gramsci," Critica Marxista 
(1989/5): 76. 

48. On Togliatti's use and abuse of Gramsci see Paul Ginsborg, op. cit., p. 57. On 
hegemony see Aldo Schiavone, Per il nuovo Pa (Bari: Laterza, 1985), p. 85. 
For an analysis of Togliatti's strategy and the interpretations of it, see Donald 
Sassoon, Togliatti e la via italiana al socialismo (Turin: Einaudi, 1980), pp. 
1-62. The most complete history of the PCI at the end of the war remains 
Paolo Spriano, Storia del Partita comunista italiano, vol. 5 (Turin: Einaudi, 
1975). 

49. Giorgio Bocca, Palmiro Togliatti {Komt: L'Unita, 1992 edition), pp. 341-58. 
Bocca is sharply critical of Togliatti's attitude. 

50. Antonio Gambino, op. cit., p. 492. 

51. Giorgio Bocca, op. cit., p. 411. Sergio Bertelli, whose // Gruppo contains 
brilliant if unflattering insights into the PCI leadership, argues that Togliatti 
relied on his secret diplomacy with the Vatican, see // Gruppo (Milan: Rizzoli, 
1980), pp. 340-51. 

52. Franco Rodano, quoted in G. Bocca, op. cit., p. 405. 

53. Claudio Napoleoni, "Due opposti giudizi sull'economia italiana," Rinascita, 
(May 1 949): 234. For a longer discussion of the postwar PCI and the reformist 
state, see my "I comunisti italiani, il New Deal e il difficile problema del 
riformismo," Studi storici, n. 2/3 (1992): 457-78. 

54. Pietro Di Loreto, Togliatti e la "Doppiezza" {Bologm: II Mulino, 1991), p. 
169. My discussion of duplicity is based partly on Di Loreto 's book but my 
conclusion, namely, that the PCI was pretending to be revolutionary when it 
was not, is different from his. Nor do I agree with Pietro Scoppola that the 
PCI presented "the gravest of threats" to Italian democracy, see La repubblica 
deipartiti, op. cit., p. 108. Scoppola feels that new material from Cominform 
files indicates that Togliatti considered resorting to force after the PCI was 
expelled from the government. But my interpretation of the evidence — pre- 
sented by Aldo Agosti, "II PCI e la svolta del 1947," in Studi storici, n. 1 (1990): 



204 THE CRISIS OF THE ITALIAN STATE 

53-88 — is that Togliatti was feigning toughness to conform with Soviet 
criticism of him and to disarm his opponents within the PCI. 

55. For the assassination attempt, see G. Bocca, op. cit., pp. 465-75. Secchia's 
comment is given on p. 509. 

56. The success story of EmiHa-Romagna is recounted by Fausto Anderhni, Terra 
rossa, comunismo ideale, socialdemocrazia reale (Bologna: Istituto Gramsci, 
1991). For the parallels with the DC in the Veneto, see Carlo Trigilia, Grandi 
partiti e piccole imprese, (Bologna: II Mulino, 1986). 



Chapter 3 

1. Sergio Romano, L'ltalia scappata di mano (Milan: Longanesi, 1993), p. 123. 

2. L Vnita, January 28, 1994. 

3. Sergio Romano, "Italy and the New Europe," in D. Calleo and P. Gordon, 
eds., From the Atlantic to the Urals (Washington: Foundation of European 
Studies, 1992), p. 169. 

4. For this account of the 1948 elections I have drawn heavily on James Miller, 
The United States and Italy 1940-1950 (Chapel Hill: University of North 
Carolina Press, 1986), pp. 213-74. 

5. Pietro Pastorelli, La Politica estera italiana del dopoguerra (Bologna: II Mulino, 
1987), p. 118. 

6. Claudio Gatti, Rimanga tra noi (Milan: Longanesi, 1990), p. 40. 

7. Piero Bairati, Valletta (Turin: Unione Tipografico-Editrice Torrinese, 1983), 
pp. 254-69. 

8. Claudio Gatti, op. cit., p. 120. 

9. Sergio Zavoli, La notte della Repubblica (Rome: I'Unita, 1994), p. 23. 

10. Claudio Gatti, op. cit., p. 133. In general Gatti exonerates the CIA, but he is 
not altogether convincing; see my review of his book Polis (1992/3): 597-99. 

11. Giorgio Bocca, Ilterrorismo italiano (Milan: Rizzoli, 1978), p. 14. 

12. Giorgio Galli, Storia delpartito armato (Milan: Rizzoli, 1986), pp. 326-30. 

13. Claudio Gatti, op. cit., pp. 29-44. Gatti's American sources deny that Gladio 
was to be used against the PCI, but see Franco Ferraresi, "Una struttura segreta 
denominato Gladio," Politica in Italia Edizione 92, a cura di S. Hellman e G. 
Pasquino, (Bologna: II Mulino, 1992), p. 94. 

14. P. Pastorelli, op. cit., p. 176. 

15. Ibid., pp. 129-44. The offer to join was made in guarded language in Bevin's 
Commons speech of January 22 and was repeated explicitly by the United 
States in March 1948. 



Notes 205 

16. G. Baget-Bozzo, II partita cristiano alpotere, op. cit., pp. 272 and 409. 

17. Nico Perrone, Mattel, ilnemico italiano (Milan: Leonardo, 1989), pp. 97-105. 
Perrone notes that De Gasperi resisted strong U.S. pressure in 1951 when he 
granted Mattei exclusive rights in the Po Valley (p. 54). On Mattei, see also Dow 
Votaw, The Six-legged Dog {Berkeley. University of California Press, 1964). 

18. John Harper, "II vertice di Venezia," Politica in Italia Edizione 88, a cura di 
P. Corbettae R. Leonardi (Bologna: II Mulino, 1988), pp. 69-92. Also Istituto 
Affari Internazionali, L'ltalia nella politica internazionale 1985-1986 {M.'\[2in: 
Angeh, 1988), pp. 25-72. 

19. "II cerchioquadrato," supplement to II Manifesto, February 13, 1994. For 
Craxi and Siad Barre, see Sergio Turone, Corrotti e corruttori (Bari: Laterza, 
1984), p. 283. Craxi was not of course unique in Italy. For the diversion of 
Italian foreign aid to Senegal into the pockets of Senegalese and Italian 
government officials, see 5«^ (Dakar) November 11, 1993. 

20. Beniamino Andreatta, "Una politica estera per l'ltalia," II Mulino, (1993/5): 
881-91. 

21. "II cerchioquadrato," op. cit. 

22. La Stampa, February 21 , 1994. 

23. La Repubblica, October 1 , 1 993. 

24. Luigi Spaventa, La Repubblica, August 2, 1978. 

25. Sergio Romano, L Italia scappata di mano, op. cit., p. 114. 

26. F. R. Willis, Italy Chooses Europe (Oxford: Oxford University Press, 1971), 
pp. 30-41. 

27. Ibid., pp. 23 and 72. 

28. Peter Ludlow, The Making of the EMS {hondon: Butterworth, 1982), pp. 
205-17. 

29. Beniamino Andreatta, op. cit., p. 888. 

30. Alia ricerca del buon governo, campaign material of Forza Italia, p. 3 1 . 

31. See Vera Zamagni, Dalla periferia al centro, op. cit., pp. 403-20. See also "Una 
scommessa sul futuro: I'industria italiana nella ricostruzione," in L'ltalia e la 
politica dipotenza in Europa (Milan: Marzorati, 1 988). For the view that more 
government intervention was possible, see Marcello De Cecco, "Economic 
Policy in the Reconstruction Period," in S. J. Woolf, ed.. The Rebirth of Italy 
(New York: The Humanities Press, 1972), pp. 135-55. 

32. Pasquale Saraceno, Intervista sulla Ricostruzione, a cura di Lucio Villari (Bari: 
Laterza, 1977), p. 104. 

33. Michele Salvati, Economia e Politica in Italia dal dopoguerra a oggi (Milan: 
Garzanti, 1984), p. 68. 

34. Vera Zamagni, "Una scommessa sul futuro," op. cit., p. 480. See also P. 
Saraceno, op. cit., p. 127. 



206 THE CRISIS OF THE ITALIAN STATE 

35. p. Saraceno, op. cit., p. 163. 

36. David Ellwood, Rebuilding Europe {London: Longmans, 1992), p. 196. This 
is also Michele Salvati's main theme. 

37. Commissione Antimafia, Relazione sulla Camorra, December 21 , 1993, pp. 7-22. 

38. Michele Salvari, op. cit., p. 60. 

39. Vera Zamagni, "The Italian Economic Miracle revisited," Ennio di Nolfo, ed., 
Power in Europe 11 (New York: Walter de Gruyter, 1992), p. 207. 

40. The Economist, January 29, 1994, p. 63. 

41. Patrick McCarthy, "Italy: The Absent State," International Economic Ideas, 
(November-December 1993): 6-9. 

42. See Cado Trigilia, Grandi partiti e piccole imprese, op. cit. 

43. Michele Salvati, op. cit., p. 134. 

44. Pier Paolo D'Attorre, "Sogno americano e mito sovietico nell'Italiacontemporanea," 
in his edited Nemici per la pelle (Mihn: Franco Angeli, 1991), p. 31. 



Chapter 4 

1. Espresso, ]u\y 18, 1993, pp. 40-46 and August 1, 1993, pp. 24-34. 

2. Espresso, July 18, 1993, pp. 67-69. 

3. P. A. Allum, Politics and Society in Post-war Naples (Cambridge: Cambridge 
University Press, 1973), pp. 12-11 . 

4. Edward C. Banfield, The Moral Basis of a Backward Society (New York: The 
Free Press, 1958), p. 83. 

5. Giorgio Galli, Storia della Democrazia cristiana (Bari: Laterza, 1978), p. 299. 

6. V7L\\\G\n'hox%, Storia dltaliadaldopoguerra a og^^\xxm.\Y^\n2Axd^\, 1989), p. 193. 

7. G. Baget Bozzo, II Partito cristiano e Tapertura a sinistra (Florence: Valleschi, 
\911), p. 119. For this section I have drawn heavily on Baget Bozzo as well as 
on Giorgio Galli, Eanfani {Mihn: Feltrinelli, 1975), pp. 1-82. 

8. For the DC factions, see G. Pasquino, "Italian DC: A Party for All Seasons," 
in Italy in Transition, P. Lange and S. Tarrow, eds., (London: Cass, 1980), pp. 
88-109. See also Mario Caciagli, "II resistibile declino della DC," in IlSistema 
politico italiano, G. Pasquino, ed., (Bari: Laterza, 1985), pp. 101-27. 

9. For a full analysis of the political system, see Giovanni Sartori, Teoria dei partiti 
e caso italiano (Milan: SugarCo, 1982). See also Sidney Tarrow, "The Italian 
Party System Between Crisis and Transition," American Journal of Political 
Science, vol. 21, n. 2 (May 1977): 193-221. 

10. Sergio Romano, L'ltalia scappata di mano (Milan: Longanesi, 1993), p. 15. 

1 1. The Italian word for this is dietrologia. 



Notes 207 

12. Joseph La Palombara, Democracy Italian Style (New Haven: Yale University 
Press, 1987). 

13. Sidney Tarrow, Between Centre and Periphery (New Haven: Yale University 
Press, 1977). See also Gianfranco Pasquino, La Repubblica dei cittadini ombra 
(Milan: Garzanti, 1991), p. 17. 

14. For a discussion of fragmentation, see Joseph La Palombara, Interest Groups 
in Italian Politics (Princeton: Princeton University Press, 1964), pp. 137-42. 

1 5. This account is taken from Giampaolo Pansa, Bisaglia, una carriera democristi- 
ana (Milan: SugarCo, 1975). 

16. Joseph La Palombara, Interest Groups in Italian Politics, op. cit., pp. 235-46. 

17. Giorgio Galli, Storia della Democrazia Cristiana, op. cit., pp. 255-59. 

18. Paul Ginsborg, op. cit., pp. 201-08. 

19. Gianfranco Pasquino, "Italian DC," op. cit., p. 108. 

20. Giorgio Galli, Storia della Democrazia Cristiana, op. cit., p. 285. 

2 1 . For Lauro and for Gava's career until the 1 970s 1 have drawn heavily on Percy 
Allum, op. cit., pp. 274-324. This superb study caused Gava a certain amount 
of trouble. 

22. II Manifesto, December 12, 1992. 

23. Giorgio Bocca, Z'/w/^-rwo (Milan: Mondadori, 1992), p. 210. 

24. Commissione Antimafia, Relazione sulla Camorra, December 21, 1993, p. 
159. See also Commissione Antimafia, relatore Luciano Violante, Relazione 
sui rapporti tra Mafia e politica. May 28, 1993, p. 97. 

25. Z-'f/mVi. March 13, 1992. 

26. Raimondo Catanzaro, op. cit., p. 190. 

27. Salvatore Lupo, op. cit., p. 165. There are major differences of interpretation 
between Lupo and Pino Arlacchi, La Mafia imprenditrice (Bo\o^na.: II Mulino, 
1993). Where Arlacchi distinguishes between an old and a new Mafia, Lupo 
stresses continuity. Whereas Arlacchi considers the emergence of the criminal 
as businessman to be the major development in recent Mafia history, Lupo 
depicts it as a normal phase in the Mafia's evolution. In general Catanzaro is 
closer to Lupo. 

28. La Repubblica, February 26, 1994. 

29. A fresh controversy over Sciascia's interpretation of the Mafia broke out in 
1993. For a balanced judgment, see Nicola Tranfaglia in La Repubblica, 
December 21, 1993. For Lupo's view, see op. cit., p. 219. 

30. Commissione Antimafia, Insediamenti e infiltrazioni di soggetti ed organizzazioni 
di tipo mafioso in aree non tradizionali, December 17, 1993, p. 21 . 

31. S. Lupo, op. cit., p. 195. For the history of the drug trade see R. Catanzaro, 
op. cit., p. 238. 

32. // Manifesto, October 21,1 993. 



20 8 THE CRISIS OF THE ITALIAN STATE 

33. Tiziana Parenti, Forza Italia Convention, Rome, February 6, 1994, text provided 
by Press Office of Forza Italia. Silvio Berlusconi, La Stampa, March 21, 1994. 

34. La Stampa, November 15, 1993; La Repubblica, November 17, 1993; and 
Avvenire, December 9, 1993. 

35. L 'Espresso, July 22, 1994, p. 49. 

36. For the historical account I have drawn heavily on Carlo Guarnieri, Mag- 
istratura e Politica in Italia (Bologna: II Mulino, 1992). However Guarnieri's 
account of the 1980s differs slightly from mine. 

37. Giampaolo Pansa, Lo Sfascio (Rome: L'Unita-Sperling e Kupfer, 1993), pp. 
91-98. 

38. Giorgio Bocca, op. cit., p. 34. 

39. Claudio Fracassi e Michele Gambino, Berlusconi, una biografia non autorizzata 
(Rome: Awenimenti, 1994), p. 61. 

40. L 'Espresso, July 22, 1994, p. 48. 

41. Giampaolo Pansa, I Bugiardi (Rome: L'Unita-Sperling e Kupfer, 1993), p. 189. 



Chapter 5 

1. The quotations from Berlusconi are taken from "II Messaggio di Berlusconi 
in TV," reproduced in Claudio Fracassi e Michele Gambino, Berlusconi, una 
biografia non autorizzata (Rome: Awenimenti, 1994), pp. 56-58, and from 
Berlusconi's February 6 speech to the Forza Italia Convention (text supplied 
by Press Office of Forza Italia). 

2. For Fininvest's troubles with the Milan magistrates, see LEspresso, July 29, 
1994, pp. 57-59. 

3. C. Fracassi e M. Gambino, op. cit., p. 44. 

4. Giampaolo Pansa, I Bugiardi {Rome: L'Unita-Sperling e Kupfer, 1994), p. 19. 

5. The term state bourgeoisie wns popularized in the 1970s by Eugenio Scalfari 
and Giuseppe Turani as well as by Guido Carli — see note 7. They used it to 
indicate groups that worked in the public sector and were part of the DC-PSI 
power system. Such groups were contrasted with the private sector. Since the 
state bourgeoisie has expanded since the 1970s, I have expanded the term to 
include private sector groups that rely heavily on political power. Because the 
entire Italian private sector is linked with the state — see chapters 1 and 3 — this 
involves a difficult but necessary distinction. Moreover because politicians in 
the 1990s intervened more massively in business than they did during the 
1970s, they too may, when they play this role, be included in the state 
bourgeoisie. 



Notes 209 

6. Aurelio Lepre, Storia della prima Repubblica {Boio^nx. II Mulino, 1993), p. 215. 

7. On the nationalization, see Giorgio Mori, "La nazionalizzazione in Italia: il 
dibattito politico-economico," in La nazionalizzazione dell'energia elettrica: 
Atti del Convegno per ilXXVanniversario dell 'istiruzione dell 'Enelihatn: Laterza, 
1989), pp. 91-116. My account of Edison's misadventures owes much to 
Eugenio Scalfari e Giuseppe Turani, Razza padrona (Milan: Feltrinelli, 1974). 
See also Guido Carli, Intervista sul capitalismo italiano, a cura di Eugenio 
Scalfari (Bari: Laterza, 1976), pp. 76-112. Carlo Scognamiglio, the new 
Speaker of the Senate, saw in the nationalization of the electrical industry the 
first sign of the shift of economic power from Milan to Rome, see Espresso, 
April 29, 1994, p. 62. 

8. Espresso, July 4, 1993, p. 89. 

9. For Cuccia I have drawn on Fabio Tamburini, Un Siciliano a Milano (Milan: 
Longanesi, 1992). See also Steven Solomon, "The Last Emperor," Euromoney 
(October 1988): 42-60 and Geoffrey Dyer, "Cuccia's Last Stand," Euromoney 
(December 1993): 26-32. Another good portrait of Cuccia is, Alan Friedman, 
Agnelli and the Network of Italian Power {London: Harrap, 1988), pp. 87-109. 

10. Espresso, ]\i\y 11, 1993, p. 43. 

11. F. Tamburini, op. cit., p. 299. 

1 2. L Vnita, February 25, 1 994. 

13. For the Cuccia-Sindona struggle I have used E. Scalfari and G. Turani, op. 
cit., pp. 280-95; F. Tamburini, op. cit., pp. 237-304; and Giorgio Galli, 
L'ltalia sotteranea {Bzn: Laterza, 1983), pp. 169-77. 

14. E. Scalfari e G. Turani, op. cit., p. 281. 

15. Ibid., p. 288. 

16. Espresso, July 11, 1994, p. 46. Fininvest's estimate is around $2 billion and 
Cuccia's around S4 billion. For recent data we have used an exchange rate of 
LIT 1 ,500 to the dollar, which is a rough average for the years 1990-94. 

17. E. Scalfari e G. Turani, op. cit., p. 356. 

18. Giorgio Galli, op. cit., p. 180. 

19. Giampaolo Pansa, Bisaglia, op. cit., pp. 320-36. For the PCI view, see 
Rinascita, February 21, 1975, and June 20, 1975. 

20. G. Carli, op. cit., p. 69. 

21. G. Galli, op. cit., p. 180. 

22. La Repubblica, February 22, 1994. 

23. Economist, February 12, 1994. 

24. This is my interpretation of Alan Friedman's exhaustive account of the 
arms-for-lraq affair — Spider's Web (New York: Bantam Books, 1993). 

25. Espresso, June 27, 1993, pp. 22-30. 

26. Cesare Romiti, Questi anni alia Eiat {Mihn: Rizzoli, 1988), p. 82. 



210 THE CRISIS OF THE ITALIAN STATE 

27. See, for example, Napoleone Colajanni, "Dietro Cefis chi governa?" Rinascita, 
March 21, 1975. 

28. Cesare Romiti, op. cit., p. 17. 

29. E. Scalfari e G. Turani, op. cit., p. 460. 

30. Steven Solomon, op. cit., p. 57; F. Tamburini, op. cit., pp. 386-404. For a 
view favorable to Schimberni, see Alan Friedman, Agnelli, op. cit., pp. 242-57. 
For the establishment's view, see Cesare Romiti, op. cit., pp. 240-64. 

31. £j/>r«5<?, August 8, 1993, pp. 64-70 and August 15, 1993, pp. 46-54. 

32. Espresso, August 1 , 1993, p. 59. 

33. The Sergio Cusani trial did not provide precise information on the amount of 
money or how much went to Craxi. 

34. La Repubblica, March 9, 1994. 

35. E. Scalfari e G. Turani, op. cit., pp. 29 and 460. 

36. La Repubblica, February 3, 1994. 



Chapter 6 

1. Communist spokesmen have tried to distinguish between the project of the 
historic compromise and the reality of the governments of National Solidarity 
during 1976 to 1979, see Alessandro Natta, Critica marxista 2, (1985), p. 29. 
But this is specious. 

2. Antonio Bisaglia in Giampaolo Pansa, Bisaglia: una carriera democristiana 
(Milan: SugarCo, 1975), p. 355. 

3. Cesare Romiti, Questi anni alia Fiat {M'lhn: Rizzoli, 1988), p. 17. 

4. Enrico Berlinguer, "Imperialismo e coesistenza alia luce dei fatti cileni," 
Rinascita, September 28, 1973, p. 3. Reprinted in La questione comunista, 
Antonio Tato, ed., (Rome: Riuniti, 1975), p. 609. 

5. r/w^ (European edition), June 30, 1975, cover page. 

6. Enrico Berlinguer, "Intesa e lotta di tutte le forze democratiche e popolari per 
la salvezza e la rinascita dell'ltalia," XLV Congresso del PCI, Atti e risoluzioni 
(Rome: Riuniti, 1975). 

7. Ibid., p. 25. 

8. Ibid., pp. 45 and 51. 

9. "Intervento di BrunoTrentin," XIV Congresso del PCL Atti e risoluzioni {Kome: 
Riunite, 1975), p. 446. 

10. Aldo Schiavone, Per ilnuovo /'C/(Bari: Laterza, 1985), p. 85. 

11. Ibid., p. 76. 



Notes 2 1 1 

1 2. Giuseppe Are, Radiografia di un partita: il PCI negli anni 70 (Milan: Rizzoli, 
1980), p. 51. 

13. E. Berlinguer, "Conclusioni," XIV Congresso del PCI, p. 634. 

14. Alberto Asor Rosa argues that Moro wanted the DC to retain its central role 
but to become a more popular party, see A. Asor Rosa, "La cultura politica del 
compromesso storico," Laboratorio politico, nos. 2-3, (1982): 12. But it is hard 
to see how Moro pursued the second goal between 1976 and 1978. 

15. Intervista, February 3, 1976, reprinted in Conversazioni con Berlinguer, Anto- 
nio Tato, ed., (Rome: Riuniti, 1984), p. 60. This surprising omission is noted 
by Gianni Baget Bozzo — "Communist culture has never attempted ... a 
political analysis of the Catholic Church and especially of the Italian Church." 
Gianni Baget Bozzo, "La DC, la Chiesa e II compromesso storico," Laboratorio 
politico, nos. 2-3, (1982): 339. 

16. Leonardo Sciascia, // Contesto (Turin: Einaudi, 1971), p. 74. 

17. P. P. Pasolini, Letter e luterane (T\inn: Einaudi, 1976), p. 51. 

18. Giorgio Amendola, "Coerenza e severita," Politica ed economia, July-August 
1976, p. 7. 

19. For Berlinguer's language, see Austerita, occasione per trasformare I'ltalia 
(Rome: Riuniti, 1977). 

20. Marzio Barbagli e Piergiorgio Corbetta, "Partiti e movimenti: aspetti e 
rinnovamento del PCI," Inchiesta, January-February 1978, p. 11. For the 
FGCI figures see Marcello Fedele, Classi e partiti negli anni 70 (Rome: Riuniti, 
1979), p. 184. 

21. Barbagli e Corbetta, op. cit., p. 8. 

22. Paul Ginsborg, Storia d'ltalia dal dopoguerra a oggi, vol. 2, (Turin: Einaudi, 
1989), p. 462. 

23. The judgment that the Historic Compromise was primarily defensive is put 
most clearly by Gianfranco Pasquino, "II PCI nel sistema politico italiano degli 
anni settante," La Giraffa e il Liocorno, a cura di S. Belligni (Milan: Franco 
Angeli, 1983), p. 45. His interpretation was attacked byAIdo Schiavone — op. 
cit., p. 16 — ^who argues that Berlinguer aimed at a Socialist transformation of 
Italy. My interpretation is closer to Pasquino 's, but the fact that PCI strategy 
could be interpreted so differently is yet another sign of its ambiguity. 

24. P. P. Pasolini, "10 giugno 1974. Studio sulla rivoluzione antropologica in 
Italia," Scritti corsari i}AA'i.w. Garzanti, 1977), pp. 46-52. 

25. halo Calvino, La giornata di uno scrutatore (Tunn: Einaudi, 1963), p. 37. 

26. Arturo Parisi e Gianfranco Pasquino, eds., Continuita e mutamento elettorale 
in Italia (Bologna: II Mulino, 1977), p. 30. 

27. Giuseppe Are, op. cit., p. 132. 



212 THE CRISIS OF THE ITALIAN STATE 

28. Patrick McCarthy, "The Parliamentary and Non-Parliamentary Parties of the 
Far-Left," in Italy at the Polls 1979, Howard R. Penniman, ed., (Washington: 
American Enterprise Institute, 1981), pp. 193-211. 

29. G. Pasquino and A. Parisi, op. cit., p. 28. 

30. Robert Flanagan, David Soskice, and Lloyd Ulman, Unionism, Economic 
Stabilization and Incomes Policy Q^zsKm^ton: Brookings Institute, 1983), pp. 
529-61. I have relied much on this analysis of what the authors call Eu- 
rocommunism as incomes policy. 

31. Michele Salvati, "Col senno di poi," Quademi piacentini G. (1982): 7. 

32. Ibid., p. 10. 

33. Fernando di Giulio e Emmanuele Rocco, Un ministro ombra si confessa (Milan: 
Rizzoli, 1979), p. 39. 

34. Ibid., pp. 152-53. 

35. For more detailed analysis of these laws see Gerardo Chiaromonte, Le scelte 
della solidarieta nazionale (Rome: Riuniti, 1986), pp. 48-49, and Giuseppe 
Vacca, Tra compromesso e solidarieta (Rome: Riuniti, 1987), p. 107 ff. For a 
negative judgment on them, see Leonardo Paggi e Massimo D'Angelillo, / 
Comunisti italiani e il riformismo, (Turin: Einaudi, 1986), p. 149. 

36. Alberto Franceschini, Mara, Renato e io (Milan: Mondadori, 1988), pp. 3-6. 

37. Stephen Hellman, Italian Communism in Transition: The Rise and Fall of the 
Historic Compromise in Turin (Oxford: Oxford University Press, 1989), pp. 
87-90. 

38. Leonardo Sciascia, L'Affaire Moro (Palermo: Sellerio, 1978), p. 32. 

39. Both Hellman — op. cit., p. 91 — andGinsborg — op. cit., p. 512 — suggest that 
the PCI's Third International heritage re-emerged in its lack of sensitivity 
towards civil liberties. 

40. Paul Ginsborg, op. cit., p. 539. 

41 . Enrico Berlinguer, Per uscire dalla crisi. Rapporto al Comitato centraU, Decem- 
ber 10, 1974, op. cit., p. 22. 

42. Joan Barth Urban, Moscow and the Italian Communist Party (London: Tauris, 
1986), p. 304. 

43. Enrico Berlinguer, "Intesa e lotta," op. cit., p. 20. 

44. Ibid., p. 34. 

45. Adriano Guerra, "Condizioni per un nuovo internazionalismo," Rinascita, 
March 7, 1975, p. 19. 

46. Intervista, June 15, 1976. Reprinted in Conversazioni con Berlinguer, p. 70. 

47. For an analysis of the speech, see Giuseppe Fiori, Vita di Enrico Berlinguer 
(Bari: Laterza, 1984), p. 333. See Aldo Schiavone, op. cit., p. 87, who stresses 
that Berlinguer's remarks shocked many Italian Marxists. 



Notes 2 13 

48. Giampaolo Pansa, Ottobre addio (Milan: Mondadori, 1982), p. 111. 

49. "II discorso di Berlinguer a conclusione del Festival di Genova," L'Unita, 
September 18, 1978. 

50. Intervista, July 15, 1976. Reprinted in Conversazioni con Berlinguer, p. 65. 

51. La Repubblica, July 4, 1 990. 

52. For this interpretation of U.S. foreign policy I have drawn heavily on Dana 
Allin's Ph.D. thesis, "Understanding the Soviet Threat to Western Europe: 
American Views 1973-1985," Paul H. Nitze SAIS, European Studies. How- 
ever the judgments are my own. 

53. Henry Kissinger, "Communist Parties in Western Europe," Eurocommunism: 
The Italian Case, Austin Ranney and Giovanni Sartori, eds., (Washington: 

AEI, 1978), pp. 185-88. 

54. Giuseppe Fiori, op. cit., pp. 288-89. He takes the tone of nationalist outrage, 
which was a frequent and unsuccessful PCI tactic. Schmidt's hostility did not 
prevent him two years later from appealing personally to Berlinguer not to 
block Italian entry into the EMS, see Chiaromonte, op. cit., pp. 138-39. The 
Tribune wing of the Labor Party showed some sympathy for the PCI. 

55. Mario Margiocco, Stati Uniti e PCI {Buri: Laterza, 1981), pp. 233-37 and 278. 

56. Ibid., p. 270. 

57. Richard N. Gardner, // Corriere della Sera, November 15,1 977, p. 6. Roberto 
Leonard!, "Gli Stati Uniti e il compromesso storico," // Mulino, May-June 
1978, p. 387, notes that there was no pressure on the United States from the 
DC groups supposedly favorable to the PCI. 

58. Zbigniew Brzezinski, Power and Principle: Memoirs of the National Security 
Advisor {London: Weidenfeld, 1983), pp. 31 1-13. 

59. Stephen Hellman, op. cit., p. 147. 

60. Paolo Franchi e Luciano Canfora, "Due ipotesi su Enrico Berlinguer," in 
Micromegas, 1 (1988): 79-88. 

61. One Emilia leader, who asked to remain anonymous, told me that Berlinguer 
was the last great Communist leader and that he had brought this distinction 
on himself] For a more favorable judgment on Berlinguer's last years by the 
new secretary of the PDS see Massimo D'Alema, "Berlinguer non era triste," 
L'Espresso. June 17, 1994, pp. 48-50. 

62. Marc Lazar, Maisons rouges (Paris: Aubier, 1992), p. 325. Lazar's thesis is that 
historians, both Italian and Anglo-Saxon, have overstressed the heretical aspea of 
the PCI, which was very much a Communist party. The same conclusion could 
also be drawn from Piero Ignazi's Dal Pci al Pds (Bologna: II Mulino, 1992). 

63. "Documento approvato dalla Direzione del PCI, November 27, 1980," re- 
printed in Conversazioni con Berlinguer, op. cit., p. 213. 



214 THE CRISIS OF THE ITALIAN STATE 

64. Guido Carli, op. cit., p. 23. 

65. Intervista, July 28, 1981. Reprinted in Conversazioni con Berlinguer, op. cit., 
p. 251. 



Chapter 7 

1. Ilvo Diamanti, "Cosi compatti gli squadroni del Nord?" Reset, December 
1993, p. 13. 

2. See John L. Harper, Bettino Craxi and the Second Center-Lefi Experiment, ]ohns 
Hopkins University Bologna Center Occasional Papers, Bologna, Italy, 1986. 

3. Gerardo Chiaromonte, Le scelte della solidarieta democratica (Rome: Riuniti, 
1986), p. 30. 

4. Gianni Riccamboni, L'identita esclusa (Turin: Liviana, 1992), pp. 169 and 
188. 

5. Carlo Carboni, "Introduzione," in C. Carboni, ed.. Class i e Movimenti in Italia 
1970-1985 (Bari: Laterza, 1986), p. xiii. 

6. Alessandra Venturini, "II mercato del lavoro negli anni Ottanta," in 
Giangiacomo Nardozzi, ed., // ruolo della Banca Centrale nella recente 
evoluzione dell 'economia italiana {Mihn: Franco Angeli, 1993), p. 108. 

7. Paolo Sylos Labini, "Struttura sociale, sviluppo e classi sociali," in C. Carboni, 
op. cit., p. 218. 

8. Marco Revelli, Lavorare in Fiat (MWnn: Garzanti, 1989), p. 122. 

9. Arnaldo Bagnasco, "La struttura di classe nelle tre Italic," in C. Carboni, op. 
cit., p. 75. 

10. Bettino Craxi, "II Vangelo socialista," L 'Espresso, August 27, 1978, pp. 24-29. 
For a contemporary reaction see my "The Italian Socialist Party Launches an 
anti-Communist Crusade, " Tribune, September 28, 1978. 

11. On the 1976 to 1979 period, see Gianfranco Pasquino, "The Italian Socialist 
Party: Electoral Stagnation and Political Indispensability," in Howard R. 
Penniman, ed., Italy at the Polls 1979 (Washington: American Enterprise 
Institute, 1981), pp. 141-71. See also David Hine, "The Italian Socialist Party 
under Craxi: Surviving But Not Reviving," in Italy in Transition, P. Lange and 
S. Tarrow, eds., (London: F. Cass, 1980), pp. 133-48. 

12. On this period, see G. Pasquino, "Modernity and Reforms: The PSI Between 
Gamblers and Entrepreneurs," West European Politics (J^nu^ry 1986): 112-35. 

13. John L. Harper, op. cit., p. 14. On Craxi's premiership, see also David Hine, 
"The Craxi Premiership," in Robert Leonardi and Raffaelle Nanetti, eds., 
Italian Politics, vol 1 (London: Frances Pinter, 1986), pp. 105-16. 



Notes 215 

14. See Jan Kregel, "La politica del cambio della Banca d'ltalia e la ristrutturazione 
della industria italiana 1980-1985," in Giangiacomo Nardozzi, op. cit., pp. 
59-98. 

15. Aurelio Lepre, op. cit., pp. 299-301. 

16. Censis, L'ltalia in Politica 3 (Rome: Censis, 1994), p. 16. 

17. Umberto Bossicon Daniele Vimercati, // Ven to da I No rd {Mihn: Sperling and 
Knupfer, 1992), p. 47. 

18. For the Lega's language, see Roberto lacopino e Stefania Bianchi, La Lega ce 
I'ha cruda (Milan: Mursia, 1994). 

19. La Voce, April \2, \994. 

20. La Voce, May 10, 1994. In April 1994, when the prime rate was 8.35 percent, 
the average small company in Lazio paid 15 percent, see La Voce, May 12, 
1994. 

21. Antonio Bisaglia, quoted by Ilvo Diamanti, op. cit. 

22. Renato Mannheimer, "La crisi del consenso per i partiti tradizionali," in R. 
Mannheimer, ed., La Lega Lomharda {Mihn: Feltrinelli, 1992), pp. 13-33. See 
also Gianfranco Pasquino, La Nuova Politica (Bari: Laterza, 1992), pp. 3-15. 

23. Roberto Biorcio, "La Lega come attore politico," in La Lega Lombarda, op. 
cit., p. 43. For the phases of Lega history I have relied on this article, on 
Biorcio's "Nel ventre della Lega," II Manifesto, July 16, 1993, and on G. 
Pasquino, La Nuova Politica, op. cit., pp. 15-36. 

24. Ilvo Diamanti, "Intervista," L'Unita, December 10, 1993. 

25. Renato Mannheimer, "The electors of the Lega Nord," in G. Pasquino and P. 
McCarthy, eds., The End of Postwar Politics in Italy {^ovAAev. Westview, 1993), 
pp. 85-107. 

26. R. lacopino e S. Bianchi, op. cit., p. 96. 

27. Gustavo Zagrabelsky, "Pathos e realta del Federalismo," Reset, op. cit., p. 18. 
For the Lega's federalism, see II Manifesto, December 12, 1993. 

28. Gianfranco Pasquino, La Repubblica dei cittadini ombra, op. cit., p. 74. 

29. Enzo Balboni, "I nodi costituzionali di una difficile crisi di governo," Politica 
in Italia, Edizione 1988, Piergiorgio Corbetta e Robert Leonardi, eds., (Bolo- 
gna: II Mulino, 1988), pp. 47-68. 

30. Gianfranco Pasquino, "La crisi del governo Di Mita," Politica in Italia, 
Edizione 1990, Raimondo Catanzaro e Filippo Sabetto, eds., (Bologna: II 
Mulino, 1991), pp. 51-68. On the PSI between 1987 and 1992, see David 
Hine, "The Italian Socialist Party and the 1992 Election," in The End of 
Postwar Politics in Italy, op. cit., pp. 50-62. 

31. An ex-DC parliamentarian, Angelo Rojch was arrested for allegedly pocketing 
vocational training funds, see La Voce, May 13, 1994. For Kohl's comment, 
see Giorgio Bocca, Z'/«^r«o (Milan: Mondadori, 1992), p. 10. 



216 THE CRISIS OF THE ITALIAN STATE 

32. Sabino Cassese e Giulio Vesperini, "Come sono cambiati i rapporti tra sistema 
politico e burocrazia," Stato dell'Italia, a cura di Paul Ginsborg (Milan: U 
Saggiatore-Bruno Mondadori, 1994), pp. 488-93. See also Marco Cammelli, 
op. cit. 

33. Censis, Italy Today 1990 (Rome: Fondazione Censis, 1991), p. 9. 

34. Gianfranco Pasquino, La Repubblica dei cittadini ombra, op. cit., p. 77. 



Chapter 8 

1. Giampaolo Pansa, I Bugiardi {Rome: L'Unita-Sperling e Kupfer, 1994), p. 
190. 

2. Giampaolo Pansa, Lo Sfascio (Rome: L'Unita-Sperling e Kupfer, 1993), pp. 
107-14. First published in La Repubblica, December 14, 1983. 

3. See our "The Communists Divide and Do Not Conquer," in The End of 
Postwar Politics in Italy (Boulder: Westview, 1 993), Gianfranco Pasquino and 
Patrick McCarthy, eds., pp. 31-49. 

4. OECD, Economic Survey 1992-1993, Italy (Paris: Organization of Economic 
Cooperation and Development, 1993), pp. 13-29. 

5. Commissione Parlamentare d'Inchiesta sul fenomeno della Mafia, Relazione 
sui rapporti tra Mafia e Politica, Relatore: Luciano Violante, p. 57. 

6. La Voce, M^y 26, 1994. 

7. OECD, op. cit., pp. 45-49, 60, and 68-76. 

8. OECD, Economic Survey 1994, Italy (Paris: Organization of Economic Coop- 
eration and Development, 1994), p. 13. 

9. See our "Inching Towards a New Regime," in G. Pasquino and P. McCarthy, 
eds., op. cit., pp. 168-70. 

10. Censis, Rapporto sulla situazione del Paese 1992 (Rome: Censis Foundation, 
1993),p. xxii. 

1 1 . Gianfranco Brunelli, "Nel tramonto della DC," Chiesa in Italia 1993, Annale 
di "II Regno" {Bologna: Edizioni Dehoniane, 1993), p. 100. 

12. Commissione Parlamentare d'Inchiesta, op. cit., p. 34. 

13. Ibid., p. 55. 

14. L'Unita. May 28, 1994. 

15. Commissione Parlamentare d'Inchiesta, op. cit., p. 105. This section of the 
report was written by Alfredo Galasso. 

16. See Giorgio Bocca, L Espresso, ]une 10, 1994, p. 5. 

17. Espresso, May 27, 1994, pp. 66-68. 

18. La Repubblica. April 1 3, 1 994. 



Notes 2 17 

19. For Ciampi's economic policy see OECD, Economic Survey 1994, Italy op. 
cit., pp. 11-53. 

20. European Industrial Relations Review256 (September 1993): 15-19. 

21. La Repubblica, September 29, 1993, and October 1, 1993. 

22. £f(?«ow/VA January 29, 1994, p. 63; L'Unita, February 1 1, 1994, and February 
23, 1994. 

23. Espresso, July 1, 1994, pp. 1 52-57. 

24. Economist, May 14, 1994, p. 81. 

25. La Voce. Apn\ 26-28, 1994. 

26. Banca Commerciale Italiana, Monetary Trends n. 49 (August 1993): p. 13. 

27. La Repubblica, February 1 8 , 1 994. 

28. Luciano Benetton speaks of "a new period of the Italian economy with new 
entrepreneurs," see La Repubblica, March 5, 1994. 

29. LaVoce,}Azy\2,\99A. 

30. Espresso, April 15, 1994, p. 140, and June 10, 1994, p. 45. 

31. The election figures are taken from La Repubblica, March 30, 1994. The 
figures on switching votes come from Censis, L'ltalia in Politica 3 (Rome: 
Censis, 1994), pp. 14-16. 

32. Panorama, February 4, 1994, p. 11. 

33. Programma di govemo del PDS, p. 1 1. 

34. This summary of MSI history draws heavily on Piero Ignazi, // Polo escluso 
(Bologna: II Mulino, 1989). I also wish to thank the author for allowing me 
to consult the manuscript version of his article "II MSI da Almirante a Fini." 

35. II Polo escluso, op. cit., p. 246. 

36. L'Unita, January 20, 1994. 

37. La Repubblica, December 7, 1 993. 

38. Ibid. 

39. Domenico Fisichella, La Voce, May 20, 1994. 

40. II Manifesto. December 12, 1993. 

4 1 . Espresso, April 8, 1 994, p. 62. 

42. La Repubblica, January 29, 1994. 

43. L'Unita, U2iic\\ 11, 1994. 

44. Stefano E. D'Anna e Gigi Montecalvo, Berlusconi in Concert {hondon: Otz- 
ium, 1994), p. 191. 

45. Ibid., p. 59. 

46. // Programma di Forza Italia, p. 6. 

47. For a longer but still incomplete study of Berlusconi's language see my "II 
iinguaggio di Silvio Berlusconi," II Regno, May 15, 1994, pp. 276-78. 

48. Diakron was not legally a part of Fininvest but its independence was a fiction. 
On FI, see Alessandro Gilioli, Forza Italia (Bergamo: Ferruccio Arnoldi 



218 THE CRISIS OF THE ITALIAN STATE 

Edirori, 1994). For a longer account of the campaign see my "Forza Italia: The 
New Politics and Old Values of a Changing Italy," to be published in Stephen 
Gundle and Simon Parker, eds.. The New Italian Republic: From the Fall of 
Communism to the Rise of Berlusconi (London: Routledge, in press). 



Chapter 9 

1. The figures on seats are taken from Gianfranco Pasquino, The Unexpected 
Alternation: the Italian Elections of 1 994 {^o\ogm Center Occasional Papers, 
Bologna, 1994), p. 1 1. The author warns that the figures are imprecise because 
members change their party affiliation. Thirteen parliamentarians left the Lega 
between May and December. 

2. L 'Espresso, May 27, 1994, p. 42. 

3. For the changes in Berlusconi's language see my "Silvio Berlusconi: La parola 
crea I'uomo politico," Europal Europe, 3 (1994): 243-58. 

4. Romano Prodi, La Voce, November 17, 1994. 

5. La Voce, September 10, 1994. 

6. L Espresso, June 10, 1994, p. 25. 

7. LEspresso, August 12, 1994, p. 36. 

8. Economist, July 30, 1994, p. 23. 

9. La Repubblica, September 20, 1994. 

10. The names of these men were Carlo Rossella and Clemente Mimun. As the 
head of Channel 1 Moratti appointed Brando Giordano, an ex-DC member; 
this revived the change-without-change dispute. The new head of Channel 3 
was Daniele Brancati. The regional TV network was placed in the hands of 
Piero Vigorelli, another ex-Craxi supporter who had gone over to Berlusconi, 
see II Manifesto, September 18, 1994. 

11. La Voce, May 13, 1994. 

12. La Voce, ju\y 16, \994. 

13. Ibid. 

14. La Repubblica, October 6, 1994. 

15. Among the many who made such statements were Domenico Contestabile 
and Tiziana Maiolo, the chairperson of the House Justice Commission, see La 
Voce, September 1 1 , 1994. Both had been New Left militants who had fought 
for the rights of imprisoned comrades. They had changed their minds about 
politics but not about prisoners. 

16. L Vmta, December 9, 1994. 



Notes 2 19 

17. Pino Mandalari's phone had been tapped and his conversations with and 
about FI and AN candidates were recorded, see Panorama, ]3LnusLrf 12, 1995, 
pp. 28-30. 

18. La Voce, December 14, 1994. 

1 9. La Repubblica, November 26, 1 994. 

20. At least one sports journalist attributed this slide to Berlusconi's absence, see 
La Stampa, October 30, 1994. 

21. Giorgio Bocca, La Repubblica, December 7, 1994. 

22. The translation loses the alliteration of the Italian: "Le chiachiere se le porta 
il vento ma cana canta." The expression "carta canta," literally "paper sings," 
is also much used by Bossi. 

23. La Voce, December 14, 1994. 

24. La Voce, December 14, 1994, and La Repubblica, November 23, 1994. 

25. Romano Prodi, La Voce, November 17, 1994. 

26. Economist, December 3, 1994, p. 78. 

27. Economist, June 30, 1994, p. 23. The Anglo-Saxon financial press became 
willy-nilly a protagonist in the Italian political struggle. Its criticism of 
Berlusconi's fmancial laxity damaged him in the eyes of the Italian elites. 

28. Ibid. 

29. La Voce, September 29, 1994. 

30. Gianfranco Pasquino, op. cit., p. 14. 

31. Financial Times, December 16, 1994. 

32. La Repubblica, January 8, 1 995. 

33. La Repubblica, January 1 0, 1 995. 

34. Mauro Calise, Dopo la Partitocrazia (Turin: Einaudi, 1994), p. 102. 

35. Z.a5?/zw/>^z, January 9, 1995. 

36. Forza Italia informa, October 31, 1994. (Text obtained from the FI Press 
Office in Rome). 

37. La Repubblica, November 3, 1994. 

38. La Voce, December 20, 1994. 

39. For a longer analysis of the groups in FI see my "Forza Italia, le vittorie e 
vicissitudini di un partito virtuale," in Piero Ignazi and Richard Katz, eds., 
L 'anno politico in Italia 7i?i?¥ (Bologna: II Mulino, in press). 

40. LEspresso, December 23, 1994, p. 17. 

41. La Repubblica, November 8 , 1 994. 

42. Piero Ignazi, Postfascisti^ Dal MSI ad AN (Bolognz: II Mulino, 1994), pp. 
113-21. 

43. La Repubblica, November 23, 1994. 

44. Secolo d'ltalia, November 25, 1994. 



220 THE CRISIS OF THE ITALIAN STATE 

45. La Repubblica, March 29, 1994. 

46. La Repubblica, December 23, 1994. 

47. La Repubblica, December 11,1 994. 

48. /I wf«w, November 25, 1994. 

49. La Repubblica, December 11, 1994. 

50. Panorama, ]3inuzxy 13, 1985, p. 16. 

51. L'Espresso, January 5, 1995, pp. 44-46. 

52. Gianni Vattimo, La Stampa, January 9, 1995. 

53. L'Espresso, January 5, 1995, p. 29. 

54. La Repubblica, December 24, 1995. 

55. This group was animated by Alberto Michelini, who had gone over from Segni 
to Berlusconi and who is widely regarded as a spokesman for Opus Dei. 

56. La K(?rf, January 6, 1995. 

57. II Giornale, ]2nwiry 13, 1995. 

58. Censis, Rapporto sulla situazione sociale delpaese 1994 (Rome: Censis Founda- 
tion, 1994), pp. 11 and 23. 



Conclusion 

1. Leonardo Sciascia, La Sicilia come metafora, intervista di Marceile Padovani 
(Rome: Mondadori, 1979), p. 23. This is the most complete statement of his 
political views that Sciascia was ever persuaded to make. For the "laceration," 
see p. 74. 

2. The Italian word is contesto, which is the title of one of Sciascia's novels. 

3. Leonardo Sciascia, Fatti diversi di storia letteraria e civile, vol. 2 (Rome: 
L'Unita-Sellerio, 1993), p. 15. 

4. Robert D. Putnam, with Robert Leonardi and Raffaella Y Nanetti, Making 
Democracy Work: Civic Traditions in Modem Italy (Princeton: Princeton 
University Press, 1993), p. 86. 

5. Paul Ginsborg, "La famiglia italiana oltre il privato per superare I'isolamento," 
in his edited Stato dell'Italia (Milan: II Saggiato re-Bruno Mondadori, 1994), 
pp. 284-90. The family has of course undergone changes, see Censis, Rapporto 
sulla situazione sociale del Paese 1994 (Rome: Censis Foundation, 1994), pp. 
308-16. 

6. Ibid., p. 16. 



INDEX 



Abbadia San Salvatore, 39 

Abruzzo, 61, 162 

AC Milan, 6, 81-82, 129, 135, 163. 
176; see also Berlusconi; soccer 

Achille Lauro, the, 48, 129 

Agnelli, Gianni, 86, 88, 90, 96-97, 149, 
154, 179 

Agnelli, Giovanni (Fiat's founder), 6, 
12, 58 

Agnelli, Susanna, 50 

Agrigento, 150 

Alcatel, 154-155 

Alfa Romeo, 92 

Alfieri, Carmine, 1, 51, 73, 95 

Algeria, 47, 49, 51, 57 

Alleanza democratica (Democratic 
Alliance) (AD), 124, 148, 150, 
158 

Alleanza nazionale (National Alliance) 
(AN), 54, 152 157-58, 161-62, 
167-72, 175, 179-85, 189-90 

Almerico, Pasquale, 75 

Almirante, 161 

Alto Adige-Sud Tirol, 178 

Amato, Giuliano, 2, 42, 74, 124, 133, 
143-47, 153, 168, 178; Amato de- 
cree, 4 

Ambrosoli, Giorgio, 87, 90, 95 

Amendola, Giorgio, 96 

Ancona, 149 

Andreatta, Beniamino, 41-42, 49, 148 

Andreotti, Giulio, 1, 5, 26, 48, GG, 82, 
88,90,97, 132, 135-36, 139, 
141-44, 151-52, 162, 190; 
governments, 61-62 



Ansaldo, 1 1 
anti-capitalism, 96 
anti-clericalism, 13 
anti-Communism, 4-5, 19-20, 27-40, 

95, 119, 124, 158-59, 164 
anti-Dreyfus movement, 13 
anti-Fascism, 12, 22-40 162, 184 
anti-Mafia, 8, 73, 140, 151-52, 159, 

175 
Arena, Paolo, 74 
Arlacchi, Pino, 143, 152 
Associazione per lo sviluppo 

dell'industria nel Mezzogiorno 

(SVIMEZ), 57 
Atlantic Alliance, 46 
Atlanticism, 45-50 
authoritarianism, ol Italian state, 9 
Avellino, 73 
A wen ire, 85, 186 
Azienda generale italiana petroli 

(AGIP), 56, 59 

Badalamenti, Gaetano, 76-77 

Badoglio, Pietro, 31-32 

BafFi, Paolo, 90 

Bagnoli (steel plant), 4, 1 1, 42 

Banca Commerciale Italiana (Italian 
Bank of Commerce) (Comit), 1, 
42,56-57,86-90,93, 131, 139, 
156-57, 163 

Banca nazionale del Lavoro, 94-95 

Banca Popolare, 72 

Banca Privata, 89-90 

Banca Romana, 1 1 

Banco Ambrosiano, 85 



THE CRISIS OF THE ITALL-iX STATE 



Banco di Roma, 56, 88-90 

Bank of Italy, 7,9, 11, 57,89, 129, 136, 
142, 170-71, 183 

Bank of Naples, 72 

Barbarossa, Emporer, 133 

Baresi, Franco, 7 

Bari, 135 

Barre, Siad, 48 

Basilicata, 72 

Bassolino, Antonio, 73, 150 

Bastogi, 88-89 

Batista, Fulgencio, 76 

Benedict XV, 25 

Beneduce, Alberto, 5, 86-87, 156 

Benetton, 101, 156 

Benvenuto, Giorgio, 146, 150 

Bergamo, 130 

Berlinguer, Enrico, 5, 10, 40, 67, 
103-106, 112, 115, 118, 120-21, 
123-24, 127-29, 141, 149, 186-87 

Berlusconi, Paolo, 82 

Berlusconi, Silvio, 6, 8, 17, 19, 29, 42. 
50, 57,78,80-83,91,95, 130-31, 
135, 139, 147-48, 167-71, 173-75, 
176-77, 179, 181-85, 187-90; 
Berlusconi decree, 4 

Beveridge, William, 34 

Biaggina, La, 140 

Bianco, Enzo, 148 

Bi-Invest, 97 

Biondi, Alfredo, 152, 173-75 

Bisaglia, Antonio, 68-70, 104, 115. 132 

Bo, Giorgio. 65 

Bologna, 7, 111, 165 

bombings, 7, 143 

Bonanno family, 77 

Bonomi, Carlo, 97 

Bontade, Paolino. 76 

Bontade, Stefano, 74 

Borrelli, Francis, 174, 176 

Borsellino. Paolo, 74. 104. 143. 175 

Bossi. Umberto, 123, 130-33. 141. 168- 
69. 171. 173, 183-85. 188 

Bottai, Giuseppe, 21 

Brescia, 130, 132. 176, 186 



Broccoletti, Maurizio, 7-8 

Brussels Pact, 46, 51 

Brzezinski, Zbigniew, 1 19 

Buongiorno, Mike, 163 

Buoni Ondinari del Tessoro (BOT), 

129. 136 
Buontempo, Teodoro, 183 
Buttiglione, Rocco, 158, 185, 189 

Cagliari, Gabriele, 6, 97 

Calabria, 8, 42, 80, 111 

Callaghan. Jim. 1 19 

Calo, Pippo. 95 

Caltanissetta. 150 

Calvi. Roberto, 26, 80. 85. 95-96. 128 

Calvino, Italo, 110-11, 127 

Camorra, 8, 58, 73, 77-78, 146 

Camorrista, 151 

Campania, 42, 111, 149. 151, 159 

Canino, General, 7 

Cantoni, Giampiero, 94 

Caprara, Massimo, 150 

Carboni. Flavio. 95 

Cariplo. 82. 94. 131, 184 

Caritas, 63 

Carli, Guido. 51-52,89,93 

Carnevale, Corrado, 5. 79. 152 

Carpi, 59 

Carter, Jimmy, 1 19 

Caselli, Giancado, 143, 152, 175 

Casey, William, 20 

Cassa Integrazione Guadagni (CIG), 146 

Cassa per il mezzogiorno, 26, 30 

Cassisa, Bishop Salvatore of Monreale, 

151 
Castanissetta, 77 
Castellammare del Golfo, 77 
Castellammare di Stabia, 73 
Catania, 148, 150-51 
Catholic Action, 22, 23, 34 
Catholic Church (Catholicism), 4-5, 9, 

12, 13-15, 17-40,44, 59,62,68, 

114-15, 125, 146, 151, 154, 157, 

186-87, 189-90 passim 
Cavalli, Giampiero, 91 



hide 



123 



Cavour, Camillo, 12-13, 25 
CDU, 83 

Cefis, Eugenio, 85-89, 91, 96-97 
Center of Christian Democracy. See 

Centro cristiano democratico 
Centre cristiano democratico (Center of 

Christian Democracy) (CCD), 17, 

179, 190 
Ccrnetti, Gianni, 147 
Chiesa, Mario, 140 
Chieti, 150, 161 
Christian Democratic Party. See 

Democrazia cristiana 
CIA, 7, 44-45, 67 
Ciampi, Carlo Azeglio, 2, 7, 41-42, 49, 

74,93, 145, 148, 151, 153, 157, 

168, 171-72, 177, 190 
Ciancimino, Vito, 75 
Ciccio, Don; The Leopard, 62 
CIG, 155 
Cini, 85 
Cirillo, Giro, 73 
clan warfare, 1 90 
clans, 76, 88, 135, 167-90; clan rule, 

167-90 passim 
Clean Hands investigation, 2, 4, 6-8, 17, 

19, 32, 48, 62, 66, 73, 80, 93, 100- 

101, 103-105, 121, 124, 128, 133, 

136, 140, 145-46, 162, 172-74, 183, 

187, 190 
clientelism, 2-4, 61-80, 82, 91-92, 94, 

103, 111, 124, 127, 146, 162, 

174-75 passim 
CLN, 28 

Coal and Steel Pool, 46 
Codignoni, Angelo, 181 
Cogefar, 6, 155 
Cold War, 8, 33, 41-42, 46-50, 109, 

120, 123, 135-36, 158 
Coldiretti, 66, 68 
CoUodi, Carlo; Pinocchio, 13 
Colombo, Emilio, 72 
Colombo, Gherardo, 176 
Comiso, 45 
Comit. 5f(f Banca Commerciale Italiana 



Commerzbank, 156 

Common Agricultural Policy (CAP), 52 

Common Market, 60 

Communism, 23,41-59, 103-104, 115, 

124, 163, 185 
Communist Re-Foundation. See 

Rifondazione comunista 
Conca d'Oro, 75 
Confalonieri, Fedele, 174 
confederation vs. federation, of Italian 

state, 134 
Confederazione generale dei lavoratori 

italiani (CGIL), 20, 30, 38, 126 
conservatism, of Italian state, 29 
Consiglio superiore della magistratura 

(GSM), 78-80, 174 
Conso, Giovanni, 147 
Consortium for Industrial Develpment, 

72 
Conte, Carmelo, 135 
Contestabile, Domenico, 168 
Contrada, Bruno, 7, 151 
Corbino, Epicarmo, 29, 55 
Corfu summit, 54 
Corleonesi, 143 
Corriere della Sera, 11,85, 96 
Corriere mercantile, II, 92 
corruption of Italian state, 5-15 
Cosa Nostra, 88, 151; see also Mafia 
Cossiga, Francesco, 79, 134-35, 142, 161 
Council of Bishops, 18, 107, 146 
Council of Europe, 50 
covert funding, 44 
Craxi, Bettino, 5, 7, 48, 53, 80, 82, 99, 

109, 121, 123-38, 139-44, 158, 161, 

163, 172 
Craxi, Bobo, 135 

Graxi-Andreotti-Forlani (CAP), 82, 135 
Credito italiano, 42, 56, 88-90, 93, 98, 

156 
Crispi, Francesco, 13, 124 
Cristiano sociali, 17-18 
Gristofori, Nino, 62 
Groce, Benedetto, 12 
Cronache sociali (Social Chronicles), 34 



224 



THE CRISIS OF THE ITALIAN STATE 



Crozier, Michel, 9 

Cuccia, Enrico, 86-91, 96-97, 101, 130- 

31, 153, 156, 163, 183-84 
Curto, Judge Diego, 78, 99 
Cutolo, Raffaele, 73 

D'Alema, Massimo, 9, 158, 160, 164, 
186-87, 189 

Dalla Chiesa, Carlo-Alberto, 74, 152 

D'Ambrosio, Gerardo, 78 

DC-PSI coalition, 5, 6, 55. 88, 93-94, 
100, 135-36, 139, 141, 155, 160 

de Gaulle, Charles, 50, 64 

De Benedetti, Carlo, 6, 92, 98 

De Gasperi, Alcide, 5, 10, 20, 23, 27- 
29, 33, 35, 37, 43, 46, 50-51, 55, 63- 
64, 106, 119, 121 

De Lorenzo, Francesco, 6, 61, 141-44 

De Mita, Ciriaco, 72, 129, 134-35, 142 

De Sanctis, Francesco, 12 

decentralization of Italian state, 140 

Dehaene, Jean-Luc, 54 

Dei, Opus, 186 

DelTurco, Otaviano, 124, 146, 158 

Delia Chiesa, Nando, 149 

Delia Valle, Diego, 156 

deirUtri, Marcello, 82, 165, 182, 188 

Delors report, 53 

Dematte, Claudio, 172 

Democratic Alliance. 5^^ Alleanza 
democratica 

Democratic Party of the Left. 5d'^Partito 
democratico della sinistra 

Democrazia cristiana (Christian Demo- 
cratic Party) (DC), 1, 3, 7, 17, 20-21, 
23-26, 28-29, 30-32, 37, 39-40, 42- 
44, 48, 51-65, 81-83, 88-91, 95-96, 
103-109, 111-12, 115, 120-21, 123- 
36, 139-49, 150-51, 153, 157, 160, 
165, 168, 172, 179-80, 183, 189 

Desario, 172 

Deutsche Bank, 154-56 

Di Donato, Giulio, 135-43 

Di Donna, Leonardo, 96 

Di Giulio, Fernando, 113 



Di Lampedusa, Giuseppe Tomasi; The 

Leopard, 8, 12 
Di Pietro, Antonio, 5, 77, 80, 133, 

140-41, 173-76 
Diakron, 165 
Dini, Lamberto, 50, 170-72, 179-80, 

188-90; Dini Government, 54 
dtrigisme.5Q,i\,m,S9, 
Disperata, La, 28 
Donat Cattin, Carlo, 66, 1 15 
Dorotei, the, 65-66, 69, 73; Doroteo 

faction, 91 
Dossetti, Guiseppe, 25, 33-34, 49, 56, 

63-64 
Dossettiani, 34, 46 
Dotti, Vitorio, 182 
Drago, Nino, 74, 76 
dynamism of Italian state, 8 

EC Council of Ministers, 54 

Economic and Monetary Union (EMU), 

53 
Edison, 84-85 
Egam, 91,96 

Einaudi, 27, 34, 43, 55, 91, 105 
Emilia-Romagna, 39-40, 59, 62, 70, 

109, 121, 124, 132-33, 159, 162 
Employers Association, 4, 65, 136 
ENEL, 84, 183-85 
ENI-Petromin bribary, 128 
Enimont affair 5, 19, 78, 97-99, 146 
Ente nazionale idrocarburi (National 

Petroleum Company) (ENI), 30, 47, 

56, 64, GG, 69, 85-86, 92, 97, 99, 

128 
Ente partecipazioni e finanziamento in- 

dustria manifatturiera (EFIM), 42, 

56,93,95, 145 
Eridania, 98 
Etruria, 134 
European Coal and Steel Community 

(ECSC), 51 
European Community (EC), 3, 43, 46, 

49-50, 52-53, 57, 77, 86, 93, 129, 

135-36, 142-43 



I ride 



lib 



European Cooperation Administration, 

56 
European Defense Community (EDC), 

51 
European Monetary System (EMS), 1, 

4,41-42,52, 54,60, 114, 136, 145, 

190 
European Union (EU), 9, 54; Italy and 

171, 187 
Europeanism, 51 

Faina, Carlo, 86 

Falcone, Giovanni, 74, 140, 142, 175 
Fanfani, Amintore, 47-48, 64-66, 68 
Fascism, 14-15, 21-22, 23, 26-41, 44, 

78, 133, 160, 183, 189 
Fava, Claudio, 77 
Federazione dei Giovani Comunisti 

Itaiiani (FGCI), 109 
Fellini, Federico, 26; The Nights of 

Cabiria, 22 
Ferrara, Giuliano, 168, 176 
Ferruzzi group, 1, 98, 153-54 
Ferruzzi, Serafino, 6, 87, 98-100 
Fiat, 1, 4, 6, 12, 30-31, 42, 44, 53, 58, 

60, 72, 96, 101, 104. 126, 129, 154- 

55, 177 
Fini, Gianfranco, 160-62, 183-84 
Finicomit, 157 
Fininvest, 1, 8, 82, 91, 162-63, 165, 

168-69, 171-74, 176-77, 181-82 
Finmare, 93 
Fioravanti, Valerio, 95 
Fiori, Publio, 162 
Florence, 56, 74, 110 
Fondaria, the, 87, 97, 156 
Ford, Gerald, 119 
Forlani, Arnaldo, 73, 82, 132, 142, 

146 
Formentini, Marco, 5, 133, 149 
Forza Italia (Let's Go Italy) (FI), 8-9, 

19,54,78, 139-40, 152, 155, 157- 

59, 161-63, 165, 167-68, 170-71, 

173, 175, 180-82, 185, 188-90 
Forze Nuove, 65-66 



France, 10-11, 13, 51, 126, 129; 

Gaullist, 47-48, 180 
Franklin Bank, 89 
Free Masonry, 151 
Freedom Pole, 162, 167, 184, 189 
Friuli-Venezia Giulia, 149 
Fronte dell'uomo qualunque (FUQ), 

28-29 

Galasso, Pasquale, 151 

Gandini, Raul, 5-6, 98-99, 154 

Garibaldi, Guiseppe, 12 

Gaspari, Remo, 6 1 , GG, 72, 1 50 

Gaullism, 29, 31, 162, 179 

Gava, Antonio, 71-74, 146 

Gava Family, 71-72 

Gava, Silvio, 71-72 

Gazzetta del Lunedi, La, 92 

Gazzettino, II, 70 

Gedda, Luigi, 33 

Gelli, Licio, 79, 96 

Gemeinschaft, G2, 133 

Gemifia, 157 

Generali, 89, 154 

Genoa, 39 

Genova, 150 

Gentile, Giovanni, 14, 21 

Genttiloni pact, 14 

Germany, 28, 53-54 

Gerneli, 156 

Gioia, Giovanni, 75 

Giolitti, 13, 14 

Giornale, II, 164 

Giorno, II, 59 

Giuliano, Salvatore, 31 

Gladio organization, 45; investigation, 

135 
Gnutti, Vito, 131, 136, 168 
Gonella, Guido, 25 
Gramsci, Antonio, 11-13,36, 105-106, 

109, 115, 121, 134 
Grassetto family, 69 
Great Britain, 14,40,47-48 
Greganti, Primo, 147 
Gronchi, Giovanni, 46, 66 



226 



THE CRISIS OF THE ITAIIAN STATE 



Grosolis, 69 

Gross Domestic Product (GDP), 3, 48, 

57-58, 128-29, 141, 142, 145, 

180 
Group ofSeven(G7), 48-50 
Group Services Consortium, 99 
Gullo, Fausto, 36 
Gunnella, Aristide, 75 

hegemony, 36, 40; hegemony, CathoHc, 

20-40 
historic compromise, 96, 103-108, 

110-12, 120, 128. 132, 194 
Hot Autumn of 1969, 58,86 

Illy, Riccardo, 150 

Iniziativa democratica, 65 

Internal Market, 42 

International Monetary Fund (IMF), 

112, 136, 180 
internationalization of Italian state, 43 
Istituto nazionale assicutazione mallattia 

(INAM),70 
Istituto nazionale della previdenza 

sociale (INPS), 70 
Istituto nazionale delle assicurazioni 

(INA), 170 
Istituto per la ricostruzione industriale; 

Institute for industrial reconstruction 

(IRI), 56-57, 59, 64, 84, 86, 91-93, 

148, 156 
Istituto per le opere di religione (lOR), 

19,26 
Istituto per lo sviluppo e 

I'industrializzazione del Meridione 

(Isveimer), 72 
Italcementi, 88 
Italian Bank ol Commerce. 5^f Banca 

Commerciale Italia 
Italian Communist Parry. SeePamto 

comunista italiano 
Italian People's Party. 5^<'Partito pop- 

olare italiano 
Italian Socialist Party. SeeP^nko 

socialista italiano 



John Paul II (Pope), 18, 19, 186 
John XXIII (Pope), 65 

Keynes, Maynard, 34 
Kissinger, Henry, 104, 108 
Kohl, Helmut, 135-36, 143 

La Langa, Guiseppe, 128 

La Malfa, Giorgio, 155 

LaMalfa, Uga, 10,87,90, 105 

La Pira, Giorgio, 25, 34, 47, 56 

Lama, Luciano, 106, 111, 114 

Lateran Pacts, 24, 25, 29, 37 

Latina, 150 

Lauro, Achille, 71 

Lazard Freres, 88, 156 

Lazio, 6 

Lega Nord (Northern League) (Lega), 4- 
5, 18, 80, 101, 123, 130-31, 133-36, 
143, 147, 150, 157, 159, 162, 168- 
70, 180-81, 184, 189-90; Lega 
clientelism, 101 

Lenin, 38, 105, 117 

Lentini, Gigi, 6, 176 

Leo XIII (Pope), 25 

Leone, Giovanni, 93 

Leone, Mauro, 93 

Letta, Gianni, 168 

Levi, Carlo, 28, 32 

Liberalism of Italian state, 13, 31 

Liberation, the, 8 

Ligresti, Salvatore, 87, 91, 135 

Liguria, 70, 92, 109, 128 

Lima, Salvo, 26, 66, 74-75, 77, 140, 
151-52 

lira, 3, 41,55, 135, 142, 171 

Livorno, 21 

Lo Jucco, Domenico, 168 

Locatelli, Gianni, 172 

Lombardy, 4, 59, 109, 124, 131, 133, 
146, 151, 159, 190 

Longo, Luigi, 39 

Luzzatti, Luigi, 12-13, 58, 155 

Maastricht Treaty, 3, 53, 142-43, 162 



Indt 



111 



Mafia as state, 1, 7-8, 12, 17, 21, 26, 63, 
74-80, 88, 94-95, 135, 142-43, 151- 
52, 165, 175, 181 passim 
Magistratura Democratica (MD), 79-80 
Magliana, 95 
Malpica, 7-8 
Manca, Enrico, 128 
Mancino, Nicola, 7 
Manifesto, II, 49 
Mantua, 146 
Maramotti, Achille, 156 
Marchini, Alfio, 172 
Maritain, Jacques, L'Humanisme inte- 
gral, 34 
Maroni, Roberto, 151, 168, 184-85, 

189, 190 
Marshall Plan, 20, 43, 46, 60 
Martelli, Justice Claudio, 80, 124 
Martin, Graham, 44-45 
Martinazzoli, Mino, 17-18, 146, 150, 

186 
Martino, Gaetano, 52 
Marxism, 12, 13, 40, 127; cult of, 26 
Mattarella, Bernardo, 75 
Mattei, Enrico, 27, 47, 59, 65, 69, 85, 

93,97 
Matteoli, Altero, 168 
Mattioli, Raffaele, 57, 86-87 
Mazzanti, Giorgio, 96 
Mazzotta, Roberto, 94, 101 
Mediobanca, 56, 87-88, 90, 100, 154, 

157 
Melfi, 76, 154 
Menichella, Donato, 57, 93 
Mennitti, Domenico, 161, 181 
Merzagora, Cesare, 89 
Messaggero, II, 85 
Messina, 52, 77, 152 
Micciche, Gioanfranco, 168 
Michelini, 160 

Milan, 5, 18, 21, 29, 53, 74, 76, 79, 90, 
94, 101, 109, 123, 128, 130-32, 
134, 140-43, 146, 148-49, 150, 152- 
53, 157-58, 162-65, 167, 169, 176, 
182, 184, 188, 190 



Milan Pool, 173-76 

Mirafiori, 155 

Modena, 30 

Molise, 162 

Monarchism, 31,71 

Mondadori, 157, 164 

Monnet Plan, 57 

Montecatini, 85-86 

Montedison, 86, 88-89, 96-97, 134 

Monteponi-Montevecchio, 91 

Monza, 146 

Morandi, Rodolfo, 38, 71 

Moratti, Letizia, 172 

Moro, Aldo, 7, 65, 70, 97, 107, 1 1 5, 
149; kidnapping 152 

Moscow, 10, 116 

Movement of the Popular Initiative, 69 

Movimento sociale italiano (Italian So- 
cial Movement) (MSI), 24, 22-28, 
44,61,66,67, 133, 135, 141, 146, 
150, 160-62, 184 

Mussolini, Benito, 8-9, 12-15, 20, 21- 
23,29,31,33,36-37,47,56,64. 
78, 124, 158 

Musumeci, Pietro, 95 

'ndrangheta, 8, 76, 151 

Naples, 6, 8, 64, 70-73, 77, 95, 1 10, 

150, 155, 175 
Napoleonic years, 11-12 
Napolitano, Giorgio, 120 
National Alliance. Siff* Alleanza nazionale 
NATO, 3, 45-46, 49, 50, 60, 1 16, 118, 

158-59 
Navarra, Michele, 75 
Nazism, 23 

neo-Atlanticism, 45-50, 64 
neo-Fascism, 67 
neo-Hegelianism, 12 
New Deal, 34 

Northern League. See Lega Nord 
Northern Republic, 133 
Novara, 149 
Novelli, Diego, 149 
Nuoro, 10 



228 



THE CRISIS OF THE ITALIAN STATE 



Occhetto, Achille, 19, 136, 141, 147- 

49, 150, 158, 171, 186-87 
Olivetti, 1 

Ordine nuovo (New Order), 36 
Organization of European Economic 

Cooperation (OEEC), 50, 57 
Orlando, Leoluca, 17, 77, 84, 135, 150 
Orlando, Vittorio Emanuele, 22 
Osoppo, 27 

P2, 95 

Padania, 134, 184 

Paese Sera, 85 

Pajetta, Giancarlo, 39 

Palermo, 17, 74, 76-77, 140, 150, 175; 
Palermo Jesuits, 18 

Panama affair, 13 

Pandolfi Plan, 53 

Pannella, Marco, 66 

Panorama, 164 

Parenti, Tiziana, 78, 152, 181 

Parito d'Azione, 27 

Parmalat, 101 

Parri, Ferruccio, 28, 32, 37 

Partito comunista italiano (Italian Com- 
muunist Party) (PCI), 2, 3, 7, 19-22, 
24, 27, 30-31, 34-41, 43-46, 48, 53, 
65-67, 70-71, 74-76, 92, 96, 104- 
16, 121, 124-36, 140-42, 147, 158, 
164, 168, 172 

Partito democratico della sinistra (Demo- 
cratic Party of the Left) (PDS), 9, 
19,41,46,73,78, 132, 136, 140- 
41, 143, 146, 148-50, 152, 157, 159- 
60, 167, 180, 185-87, 189-90 

Partito popolare italiano (Italian 

People's Party) (PPI), 14, 17-18, 68, 
157-58, 169, 180-81, 185-86, 189- 
90 

Partito radicale, 133, 141 

Partito repubiicano italiano (PRI), 48, 
53, 143 

Partito socialista italiano (Italian Social- 
ist Party) (PSI), 3, 5, 20, 28-29, 46, 
65, 80-84, 91-92, 99, 123-24, 132, 



135, 140-41, 143, 146-47, 149, 

158-59, 167, 172 
Pasolini, Pier Paolo, 21, 58, 108 
Pasquini, Giancarlo, 187 
Patriarca, Francesco, 73 
PattoSegni, 18, 185 
Paul VI (Pope), 27 
Pavia, 149 

PCI-DC alliance. SeeDC-VC\ coalition 
PDS-PCI coalition, 146-47, 172, 187 
Peace Treaty, 29, 43, 46 
Pecorelli, Mino, 152 
Pedde, Giacomo, 94 
Pella, Guiseppe, 46, 51 
Pertini, Allesandro, 73 
Pesenti, Carlo, 88 
Piano Solo, 84 

Piazza Fontana (bomb), 7, 45, 67 
Piccoli, Flaminio, 69, 91 
Piedmont, 32, 109, 159 
Pillitteri, Paolo, 135 
Pilo, Gianni, 181 
Piombino, 1 1 
Pirelli, Leonardi, 84, 86, 88, 90, 100, 

154 
Piromalli family, 95 
Pius XI (Pope), 14 
Pius IX (Pope), 14 
PiusXIII(Pope),31 
Pius XII (Pope), 22, 25, 33,65, 

132 
Pivetti, Irene, 133, 186 
Pleven, Ren^, 51; Pleven plan, 51 
Po Valley, 47, 98 
Poggiolini, Duilio, 6, 61 
Pomicino, 135 
Pontide, 133 
populism. Catholic, 49; populism, 

Italian, 5, 170, 183 
post-Cold War Italy, 190 
post-Unification Italy, 9-11, 30, 32 
PPI-Patto, 18-19, 157 
PPI-PDS alliance, 186 
Prague, 43; Prague Spring, 1 17 
Prandini, Gianni, 62 



Indt 



229 



Previti, Cesare, 168, 173-75, 181-82, 

185, 188 
privatization of Italian state, 4, 139-40 

passim 
Prodi, Romano, 89, 93, 98, 148, 155, 

189 
Programma Italia, 165 
Progressisti, 17, 109, 157-58 
publicization of Italian economy, 81- 

101 passim 
Publitalia, 82, 165, 168, 176, 182 
Puglia, 70, 159, 162 
Putnam, Robert, 194, 196 

Rauti, 160-62 

Ravenna, 1,98, 149 

Reagan administration, 48 

Rebecchini, Salvatore, 26 

Red Army, 22 

Red Brigade, 45, 73, 103, 117 

Reggio Calabria, 146 

regime crisis of Italian state, 4 

Remo, 150 

Repubblica, La 1 40 

Rete (Network), 17-18, 77, 141, 147, 

150, 152, 158 
Rifondazione comunista (Communist 

Re-foundation) (RC), l4l, 158, 

160, 167, 190 
Riina, Toto, 1, 74, 143, 151-52, 175, 

193 
Rimini Congress, 46 
Rinascita, 96 
Rivoli, 96-97 
Rizzoli, Angelo, 96 
Rocco code, 36 
Rodano, Frano, 40, 107 
Rome, 6, 1 1-13, 22, 33, 52, GG, 70, 74- 

75,79,95, 110, 133-34, 150, 161, 

179 
Romiti, Cesare, 6, 95-96, 104, 126, 154 
Roosevelt, Franklin, D., 23 
Rose of the Winds (right-wing group), 

7,45 
Rovelli, Nino, 90, 95 



Rovigo, 68-69 
Ruffolo, Giorgio, 124, 128 
Ruini, Cardinal Camillo, 18, 158 
Rumor, Mariano, 68-69, 92, 132 

Safim, 93 

Salerno, 35, 135 

Salo Republic, 32, 44, 168, 179 

SALT agreement, 118 

Sansa, Adriano, 150 

Santapaola, Nitto, 76, 151 

Saraceno, Pasquale, 38, 57, 71 

Saragat, 20 

Sarcinelli, Mario, 90 

Sardinia, 21, 32, 51, 71, 73, 95, 131, 

134 
Satta, Salvatore; The Day of Judgment, 

10; DeProfondis.ll 
Savona, 1 1 

Scalfari, Eugenio, 101 
Scalfaro, Oscar Luigi, 7, 142, 168, 

189-90 
Scelba, Mario, 27, 30, 34, 64 
Schimberni, Mario, 97 
Schioppa, Tommaso Padoa, 171 
Schmidt, Helmut, 119 
Schuman Plan, 46 
Schuster, Cardinal Ildefonso, 18 
Sciacia, Leonardo, 26, 193; The Day of 

the Owl, II Contesto, 76 
Scoccimarro, Mauro, 36, 55 
Secchia, Pictro, 39 
SecoloXIX,")! 
Segni, Mario, 17-18, 19, 135-36, 146, 

148-50, 158, 187; see also V 2x10 

Segni (Segni Pact). 
Segni Pact. See Patto Segni 
Separatism, regional, 31 
Serafino-Ferruzzi, 98-99 
Servizio informazioni difesa, 45 
Servizio informazioni forze armate 

(SIFAR), 44-45 
Sforza, Carlo, 45-46, 49-50 
Sicily, 12,21,42,47,63,66,75, 111, 

134, 150-52, 165, 167, 175, 190 



230 



THE CRISIS OF THE ITALIAN STATE 



Siena, 149 

Signorile, Claudio, 48, 124, 128, 135 

Sindona, Michele, 84-85, 87-90, 94-96, 

101 
Single Europe Act, 53, 129 
Sinigaglia, Oscar, 30; Sinigaglia Plan, 

51, 56-57 
SIR, 90, 96 
SME, 84, 92, 170 
Snam, 69 
soccer, 173 

social democrats, 20-21 
Socialism, 13-15,40, 59, 126-27, 180, 

190 
Societa di Intermediazione Mobiliare, 

156 
Sogno, Edgardo, 45 
Solo Plan, 44-45 
Sorrento Congress, 160 
Spadolini, Giovanni, 135 
Spaventa, Luigi, 148 
SPD, 83 
Stalin, Joseph, 26, 35, 37, 42-43, 124, 

182 
stampa, La 92 
stare insieme, 10, 195 
Stay Behind organization. SeeG\z(^\o 

organization 
Stefanel, 101 
Sturzo, Luigi, 33, 68 

Tambroni, Fernando, GG 

Tanzi, Callisto, 101 

Taranto (Steel plant), 4, 42 

Tardini, Monsignor Domenico, 23-24 

Tatarella, Guiseppe, 168 

Tauro, Goia, 95 

Taviani, Paolo-Emilio, 46, GG, 70, 

92 
Teardo, Alberto, 128 
Teksid, 59 
tessitore, 10 

Thatcher, Margaret, 8 1 
Tirrenia, 93 
Todo Modo, IG 



Togliatti, Palmiro, 22, 27, 35-40, 43, 
55, 105-108, 116, 120, 141, 149-50 

Togliattigrad, 47 

Trane, Rocco, 135 

Tremonti, Giulio, 170, 178 

Trentino-Alto-Adige, 134 

Trieste, 43, 150 

Truman administration, 4 

Tuscany, 162 

Turin, 6, 12,21, 39,76, 110, 115, 128, 
140, 148-49, 167; Turin strikes, 21 

Unification of Italy, 12, 14-15, 24, 161; 

wars of 1 1 
Unita sanitaria locale (USL), 1 14 
United Nations, 48, 50 
United States, 20, 22, 29, 35, 41, 43-45, 

47,49,51,67,88-89 
USSR, 20, 22, 35, 37-38, 46-47 

Vald'Aosta, 131, 134 

Valerio, Giorgio, 85 

Valletta, Vittorio, 6, 12, 22, 27, 30, 44, 

58, 93, 126 
Vance, Cyrus, 119 
Vanone, Ezio, 38 
Varese, 130-32, 147 
VAT, 112-13 
Vatican, the, 10, 13, 19-20, 22, 43, 64, 

68,88, 186 passim 
Veitroni, Walter, 186 
Veneto, the, 13, 40, 59, 68-69, 125, 

130, 167 
Venice, 52, 68, 110, 150 
Vercelli, 149 

Vigano, Renata; L'Agnese va a moririe, 11 
Violante, Luciano, 73, 143, 151-52 
Visconti, Luchino; Rocco and His 

Brothers, 58 
Volpi, 85, 101 

Yeltsin, Boris, 50 

Zavoli, Sergio, 172 
Zumpino, Adrianno, 140-141 



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